TORONTO, Jan. 27, 2012 /CNW/ - The United Steelworkers (USW) is holding
the Bank of Montreal's (BMO: TSX) board of directors responsible for a
questionable loan the union says is prolonging a historic strike in
Members of USW Local 526 have been on the picket line for more than two
years at Toronto manufacturer Infinity Rubber. The dispute is one of
the longest strikes in the city's history.
In a strongly worded letter sent to all BMO directors, USW National
Director Ken Neumann questions the bank's decision to offer new
financing to a group that had recently gone through a bankruptcy and
was embroiled in a continuing labour dispute.
The Steelworkers originally contacted BMO with its concerns over the
loan to the Infinity Rubber group in October 2011. The bank responded
with a terse statement that it could not discuss financial services
provided to a customer without their consent, and that commercial
lending transactions were evaluated "according to clearly defined
credit and risk guidelines."
In his letter sent to the BMO board on January 16, Ken Neumann expresses
significant concerns about the rigour of these guidelines, asking the
board, "Are we to conclude that the bank's guidelines don't take labour
relations or past bankruptcies into account?"
"BMO has also told us it respects the right of people to join unions and
participate in the collective bargaining process," Neumann stated.
"Then why are they suppressing those rights by funding an employer
that's determined to get rid of the union? Especially when that
operation has such a bad financial history - it's unacceptable. The
members of BMO's Board of Directors have to realize they are actually
bankrolling an attack on workers."
Workers at Etobicoke-based Infinity Rubber have been on strike since
December 2009, when their employer demanded they take a 25% cut in
wages and a 50% reduction in benefits. These cuts would have been in
addition to significant wage reductions the workers had already agreed
to in 2008 to help their employer through the recession.
Infinity Rubber is the successor to Biltrite Industries, a company that
sought protection from its creditors under the Companies' Creditors Arrangement Act (CCAA) in 2009 and eventually declared bankruptcy.
Biltrite's managers, led by CEO James Chung, purchased the Toronto plant
during the CCAA process for less than one-third of its book value and started running
it as Infinity Rubber. The initial acquisition was financed with a
high-interest mortgage from Callidus Capital Corporation, a company
specializing in high-risk loans for those who can't get bank credit.
Infinity Rubber subsequently transferred the land on which the plant
operates to BRI Holdings Inc. - a holding company incorporated by
Infinity Rubber's top managers - and refinanced the operation with a
new mortgage at a much better rate from the Bank of Montreal.
"The impact of this strike has been devastating on our members. Workers
have lost homes and cars. It's a terrible situation," says Ken
Neumann. "BMO can't just hide behind the veil of client
confidentiality. The mortgage they gave to the Infinity Rubber group
is listed for anyone to see in the Land Registry. They have to face
responsibility for what they are doing and we are going to make sure
people know about the bank's role in prolonging this tragedy."
For more information about the strike at Infinity Rubber and to see a
video telling the workers' stories and BMO's role in this dispute, go
SOURCE United Steelworkers (USW)
For further information:
Ken Neumann, USW National Director for Canada, 416-550-5950, firstname.lastname@example.org
Alexandra Eshelman, USW Strategic Campaigns, 416-544-5968, email@example.com