U.S. Steel locks out workers at Lake Erie in Canada: union

United States Steel Corp has locked out all unionized employees at its Lake Erie works in Canada, the United Steelworkers union said on Sunday.

The move, part of a contract dispute, affects nearly 1,000 workers at the Nanticoke, Ontario plant, which produced about 10 percent of U.S. Steel's raw steel output in 2012.

It is the third lockout at a former Stelco facility since U.S. Steel acquired the Canadian company in 2007.

The last lockout at Lake Erie, which started in August 2009 and ran for eight months, halted production at the plant. It was followed in the autumn of 2010 by an 11-month lockout at the nearby Hamilton works.

According to a "final offer" distributed to Lake Erie workers on April 19, U.S. Steel wants to drop the existing cost of living adjustment (COLA) from the contract, replacing it with a less generous scheme similar to those in its U.S. contracts.

"Given that the Lake Erie wage rates are already significantly higher than the USW rates in the U.S., and that the plant continues to incur huge losses, the COLA provision must be modified," the company said.

The cost of living adjustment has been a major sticking point in negotiations, United Steelworkers Local 8782 President Bill Ferguson said on Friday.

Ferguson said the company's proposed formula is not likely to be triggered in the next three years: "It's a formula that was designed not to pay," he said.

He said the plant had already been shut down for several weeks for maintenance.

U.S. Steel could not immediately be reached for comment.

(Reporting by Allison Martell; Editing by Marguerita Choy)