Abramovich's Canadian plants are going to stage a strike

Workers of two Canadian plants of Evraz failed to reach agreement with the company's management on raising wages and plan a strike at the beginning of September. But the company will still make concessions, an expert believes.
Origin source
Employees of two Canadian plants Evraz in Regina and Calgary again failed to agree with the management of the company on a new collective agreement and are preparing to announce a strike in early September. The representative of the steelworkers union of United Steelworkers (USW) Keith Turkott informed RBC about this. The representative of Evraz declined to comment.

The branches of the USW steelworkers' union in Regina and Calgary voted for the strike in May and June, but by law they had to try to find a compromise with the leadership. Last week, three-day talks between the parties again did not reach a consensus. Now the workers of Evraz Regina must wait for a 14-day period to announce a strike. "It is very likely that 300 workers in Calgary and 800 in Regina will go on strike in early September - it all depends on Evraz now," said RBC Turcott. The plan is to declare a strike simultaneously at two plants, therefore at the company in Calgary, which held negotiations earlier, they will wait their colleagues from Regina, he explained.

Workers of both plants do not agree with the terms of the new collective agreement, the last operated from August 2014 to July 2016. In particular, instead of the 3% indexation of wages, which employees insist, Evraz offers an increase of 1% in 2018-2019.

Evraz, controlled by Roman Abramovich together with partners, is the only manufacturer of large-diameter pipes in Canada and a major producer of oil and gas pipes (OCTG), he owns four plants in this country - Evraz Regina, Evraz Camrose, Evraz Calgary and Evraz Red Deer.

The company wants to expand the production of pipes at the plant in Regina because of the growing demand from the producers of shale oil and gas. In the second half of 2017, Evraz Regina plans to launch new rolling capacities (250,000 tons) and a 150,000-tonne tubing, the company said in its first half-year report. Then the company is going to begin work on large orders.

Evraz, most likely, will make concessions and settle the conflict with employees, said Maxim Khudalov, director of the corporate ratings group of ACRA. "The American market is on the rise, and the anti-Russian sentiment is strong. Therefore, to lose orders because of the strike Evraz is unlikely to be, "- he says. In addition, the USW is a very influential trade union, and the sale of American plants by Severstal in 2014 is largely due to friction with this union, Khudalov recalls.

In 2016 Evraz produced 523 thousand tons of pipes in North America (Evraz also produces seamless pipes at the company in the US). In the first half of 2017 Evraz sold 340 thousand tons of pipes in North America, which is 6.9% more than in January-June 2016, earning $ 359 million (41% of the total revenue of the US subsidiary).