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Business

Canada begins legal proceedings against US Steel

Text by NEWS WIRES

Latest update : 2009-07-18

The Canadian government has announced that it has filed legal action against American industry giant US Steel to force the reopening of two Ontario factories it says were shut down illegally, putting 1,500 employees out of work.

AFP - The Canadian government announced Friday it has begun legal proceedings against American industry giant US Steel to force the reopening of two Ontario factories it says were shut down illegally.
  
US Steel announced in March that it would temporarily close the two facilities, which it acquired from Canadian rival Stelco.
  
US Steel says the closures were necessary because of declining demand in the steel sector, but the measure put 1,500 employees out of work and has angered the Canadian government.
  
In early May, Canadian Industry Minister Tony Clement sent the steel giant a letter calling on them to comply with the conditions attached to its purchase of the Stelco facilities.
  
"When US Steel acquired Stelco Inc. in 2007, it committed to a series of undertakings regarding, among others, capital expenditures, research and development, and production," Clement said Friday.
  
"I have carefully reviewed US Steel's response to my letter. I remain of the view that US Steel is not complying with its undertakings, and I am not satisfied by its explanations for non-compliance," he said.
  
"I am therefore announcing today that, on my instructions, an application has been filed with the Federal Court of Canada asking the Court to order appropriate measures to remedy this situation."
  
When he sent US Steel the letter in May, Clement noted that a failure to comply with the terms of the purchase agreement would result in punitive action, including a possible fine of 10,000 dollars a day (8,500 US dollars).

Date created : 2009-07-18

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