TO: THE UNION OF B.C. MUNICIPALITIES CONVENTION
September 17-20, 1991, Victoria, B.C.

Dear Delegates:

Re: Resurrecting Competition in the Copper
and Copper Alloy Tubing Industry

On April 5, 1991 Wolverine Tube (Canada) Ltd. announced the closure of their Annacis Island,
B.C. tubing mill; a mill that had operated successfully for 33 years under various owners. This
closure put 180 British Columbians out of work, many of which had been with the mill since it
first opened. Together the employees. represent in excess of 3,000 years of tube making

experience.

Wolverine Tube bought the assets of Noranda Metal industries in 1988 becoming the sole
producer of copper and copper alloy tubing in Canada. They currently supply approximately
83% of the total Canadian market. They operate two other tubing mills in Canada at London,
Ontario and Montreal, Quebec. The parent corporation, Woiverine Tube Inc. operates four
tubing mills in the U.S. in Alabama, Mississippi, Oklahoma and Tennessee.

Following the closure announcement CAIMAW and the OTEU, the two piant unions, approached
Wolverine to co-operate with the B.C. Job Protection Commission to find ways of keeping the
Annacis Island mill in operation. The Company refused to even investigate these possibilities.
The two Unions then asked Wolverine to seil the mill if a new operator could be found.
Wolverine agreed. Both umions in cooperation with federal and provincial government
departments then hired a consuitant to conduct a feasibility study. The unions also identified a
group of B.C. businessmen, which includes Tex Enemark, a past provincial Deputy Minister of
Gonsumer and Corporate Affairs and past head of the Mining Association of B.C, witn the
necessary financial backing ani! who are willing to re-open the Annacis Island mill in a joint

venture with the employees anc the Unions.

AS soon as Wolverine discovered that we were both serious and would likely be successful in
re-opening the mill the company reversed it’s earlier position and refused to sell to anyone.
Wolverine stated they did not want any competition.

Our investigations into available options uncovered Wolverine’s Weight Saving Program, which
entailed the manufacture of sub-standard thin wail tubing to reduce the copper content of the
tubing below what it should be and thereby enhance their bottom line.

A Provincial Government study independently rel2ased in August confirmed our own earlier study
that Wolverine’s copper tubing failed to meet the minimum requirements of the B.C. Plumbing
Code. The Plumbing Inspectors Association of B.C. had prompted the Provincial Government
Study. They had growing concerns about significant premature pipe failures in copper tubing

systems.

The two Unions have initiated two ongoing investigations with the Federal Competition Bureau
over Wolverine’s “abuse of dominant position" and “misleading advertising". We are seeking
divestiture of the Annacis {sland mill so it can be purchased by an operator willing to produce
a quality and cost effective, value added product in B.C., using a major B.C. resource, Copper.

EIA | PAGE

Resurrecting Competition in the Copper and Copper Alloy Tubing Industry $91.708-27