Heart pills or food? Wabush mine pensioners struggle after benefits cut

Time for Ottawa to stop allowing corporations to turn back on workers: Former union president
By Sue Bailey
|payroll-reporter.com|Last Updated: 03/20/2017

ST. JOHN'S, N.L. (CP) — Jim Skinner thought after a 35-year career at the Wabush iron ore mine in Labrador he'd be set for the golden retirement he had earned.

He was wrong.

U.S.-based Cliffs Natural Resources shut the mine down in 2014, blaming high costs, falling prices and waning global demand. Its operations in Labrador and at Bloom Lake in Quebec were placed under creditor protection under the Companies' Creditors Arrangement Act as part of debt restructuring.

Health benefits for more than 2,400 retirees have since been cut and pensions slashed by 21 to 25 per cent because the plan was not fully funded, Skinner said in an interview.

“I lost over $1,000 a month on my pension,” he said. “I've lost all of my medical insurance, all of my life insurance.

“We have people that are in worse shape than I am. It's really life changing,” added Skinner, 66.

“We have a terminally ill pensioner now who has been forced to choose between buying food and life-saving medication.”

Union leaders say it's just the latest example of how retirees get left behind when multinational companies leave the country.

Skinner, who negotiated contracts at the mine as the former United Steelworkers local president, said it's time for Ottawa to stop allowing corporations to walk out on pensioners.

He and current union leaders are calling for an emergency meeting with federal and provincial politicians to come up with an assistance plan.

They're also pushing for legislation that puts workers and pensioners ahead of other creditors when companies declare bankruptcy or seek creditor protection.

“We've got to figure out a way where working people don't come last,” said Marty Warren, Ontario and Atlantic Canada director for the United Steelworkers.

“The way it's set up now, secured creditors come first,” he said in an interview. “We get what's left. And by then, normally there's nothing left.”

Cleveland-based Cliffs Natural Resources Inc. blamed the Wabush Mines closure on rising costs and falling commodity prices as demand from prime steel buyers, such as China, slowed. A spokeswoman for the company did not respond to a request for comment.

An interview request sent to federal Innovation Minister Navdeep Bains was not answered by deadline.

A spokeswoman for Service NL Minister Perry Trimper said the governing Liberals and opposition parties have jointly called for a review of federal bankruptcy laws to help Wabush Mines pensioners or at least strengthen worker protections in future.

In a letter to shareholders dated Wednesday, Lourenco Goncalves, chairman, president and CEO of Cliffs Natural Resources, said 2016 was a “turnaround” year for the company.

“Our focus on cost reduction and ... efficiencies across our operations drove great operational results for the year,” he wrote. “While there is still work to do, we ended the year with strong cash flow.”

Cliffs is well positioned for even better performance amid higher iron ore prices and an improving business climate in the U.S., Goncalves wrote.

He said “shares appreciated 432 per cent in 2016, which was the second highest gain among the more than 3,000 companies listed on the NYSE (New York Stock Exchange) in 2016.”

Skinner said his monthly pension income has gone from about $1,800 to $766.

“A lot of people right now are going through a lot of stress. They don't know what tomorrow's going to bring.”

Margie Hoben, the daughter of a Wabush miner, married her high school sweetheart, Gary, who also worked at the mine for 32 years.

They raised two daughters but had to leave them and their grandchildren to be closer to health care in Clarenville, N.L., when she developed heart problems. Cuts to her husband's medical benefits have been devastating, Hoben said in an interview.

“I'm terminal with heart disease and it's medications that I need to buy that we just can't afford now.”

Hoben, 54, said she has cut back on several drugs and is back on oxygen as a result.

“I don't want anything that we didn't work for,” she said. “I don't want handouts.”

“It's just when you work so hard for everything that you have, and then all of a sudden somebody says: 'No, you can't. You're not having this anymore. We're taking it.”'

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