EoW May 2009

EuroWire – May 2009

But he considers the Canadian “loony” unlikely to strengthen

to that point before expiration of the new agreement. The pact

renews for another 12 months a contract already in effect. The

union credits its year-long effort under the earlier agreement for

a collective reduction in Canadian labour costs at GM, Chrysler,

and Ford of about C$900 million (US$694 million). Ford has not

applied for government assistance, in either the US or Canada.

And fromDetroit . . .

In an almost concurrent development, the acceptance, on

❈

March, of renegotiated contract concessions by hourly

workers at Ford Motor Co plants across the United States

intensified pressure on General Motors and Chrysler to come

to terms with the United Auto Workers union, mandated

for bailouts by Washington. On the same day, members of

an Obama administration task force were touring GM and

Chrysler plants in the Detroit area. The two companies had

less than a month within which to demonstrate that they can

become viable.

While Ford has not sought emergency government loans,

the agreement with the UAW which freezes wages and cuts

bonuses is one of several steps the auto maker has taken

to reduce costs and maintain liquidity under the “Way

Forward” turnaround plan it launched in January 2006.

According to the union, 59% of production workers and 58%

of skilled-trades workers at Ford voted for the concessions.

Bob King, a vice president of the UAW, said in a statement,

“The voting results show that our members are prepared to

make painful sacrifices in order to be part of the solution to

the problems facing Ford and the US auto industry.”

Steel

A Russian rescue plan for the

Evraz Group finds favour in Oregon

As reported in the

Oregonian

, the Russian government may be

poised for a move of some significance to

Evraz Oregon Steel Mills

Inc, the Portland-based business acquired in 2007 by Russia’s

Evraz Group. The company manufactures cold rolled steel,

seamless tubes, and wire and related products. The

Oregonian’s

Richard Read wrote that Prime Minister Vladimir Putin endorses

a proposed mega-merger – including Evraz – that would give the

Kremlin a stake in a steel behemoth incorporating Oregon Steel.

Evraz Group, one of the world’s largest vertically integrated

steel makers, has taken on enormous foreign debt deriving

from almost $8 billion in acquisitions abroad. Russia’s state

bailout agency, chaired by Mr Putin, has already lent Evraz

$1.8 billion to refinance its foreign debt. Citing an Asia Times

report, Mr Read said that Evraz is using the funds to avoid

forfeiting such properties as Evraz Oregon Steel to the foreign

banks holding the mortgages.

Mr Putin signalled his support for a mega-merger approach

during his opening remarks on 28

January at the annual

meeting of the World Economic Forum in Davos, Switzerland.

Advantages of a diversified Russian metals-and-mining colossus