UPDATE 1-Stelco Lake Erie workers give 90-day strike notice


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TORONTO, July 27 (Reuters) - The union representing workers at Stelco Inc.'s Lake Erie plant issued a 90-day strike notice on Wednesday in a bid to defeat the steelmaker's restructuring plan.

In a letter to Stelco chief executive Courtney Pratt, the United Steelworkers said they have already notified key auto industry customers Ford Motor Co. and DaimlerChrysler of their intention to strike in late October.

The notice comes less than two weeks after Stelco, which entered protection from creditors under the Companies' Creditors Arrangement Act in January 2004, issued a restructuring plan that the union deemed unacceptable.

"It is with deep regret that I must inform you that the Local 8782 Negotiating Committee, executive and membership have given notice to Ford and Chrysler, and now to you, that we are serving 90-day notice of our intention to strike," Local 8782 president Bill Ferguson said in a letter to Stelco's Pratt.

Earlier this week, about 400 members of Local 8782, the union representing the Lake Erie workers, voted 98 percent in favor of strike action. The union local represents about 1,000 workers at Stelco's Lake Erie plant, in Nanticoke, Ontario.

The union backs a C$1.35 billion ($1.09 billion) plan by Brascan Corp. , which includes a C$500 million injection into Stelco's C$1.3 billion pension plan shortfall, raising C$400 million in new equity and C$100 million aimed at paying off secured debt.

Stelco's plan, which the steelmaker admits does not meet the demands of all stakeholders, would add C$200 million to its pension deficit and eliminate the union's ability to negotiate improvements.

"After 18 months of CCAA discussions and 12 months of contract negotiations, it has become painfully apparent to my membership and the local's leadership that you do not have any intention to negotiate with us over a meaningful restructuring of Stelco," Ferguson said.

A similar threat from Lake Erie workers last year convinced General Motors Corp. to take its business elsewhere as Stelco could not assure a supply of steel to the automaker.

The steelmaker has previously said it was hopeful to get GM back on as a customer starting in 2006.

A spokesman for GM did not want to comment on whether the strike notice would affect its order plans for 2006, calling it a labor issue between Stelco and its union.

($1=$1.24 Canadian)



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