Shortage of railway cars poses layoff risk at big Regina steel mill

REGINA – Problems in getting enough rail cars to transport pipe have led to precautionary layoff notices for more than 400 workers at the Evraz North America steel mill in Regina.

The notices went out earlier this week in the company’s tubular steel division which employs 510 people.

The layoffs could take effect Jan. 20, but the company says it hopes they won’t be necessary.

Evraz spokeswoman Melodie Ruse has said that the plant is overstocked with pipe due to transportation problems at both Canadian Pacific (TSX:CP) and Canadian National (TSX:CNR) railways.

Ruse said Evraz is optimistic that production will continue, but notices had to be issued under terms of the company’s collective bargaining agreement with workers.

The layoff notices caught everyone off guard, said Sonny Rioux of the United Steelworkers Union.

Rioux pointed out that production at the mill went right through the holiday season, so to get notice of a large layoff in the pipe division now is surprising.

Rioux is hoping that Evraz management is being upfront when it says the layoffs won’t go ahead if the problem is fixed.

“If that’s what they’re saying, obviously, we’d like to believe that’s factual,” Rioux said Friday.

Rioux said one of the reasons workers are uneasy is that the company isn’t giving an indication as to how long any layoffs could last.

“Not knowing is as much a problem to the employees as the layoff itself. If there was a clear date saying a two-week layoff — or whatever it would be — people could make adjustments in their lives.

“But having it open-ended causes a lot of concern obviously.”

Rioux said it’s his understanding the division that produces large- diameter pipes for oil and natural gas transmissions could be shut down, but a mill manufacturing smaller pipe would continue to operate.