Will June 9 mean a brave new dawn for Stelco?

Judge ex­pected to rule on re­struc­tur­ing plan

The Hamilton Spectator - - FRONT PAGE - MARK MCNEIL

“There are a lot of things to work out. I think the whole thing needs more time.” GARY HOWE PRES­I­DENT, LO­CAL 1005

A newly-re­struc­tured Stelco could be cut loose to stand on its own with a new owner as early as next month — end­ing more than two and a half years of cred­i­tor pro­tec­tion.

The com­pany has asked a Toronto court to set a “sanc­tion hear­ing” on June 9 at which Jus­tice Her­man Wil­ton-Siegel would be ex­pected to rule on a deal with ven­ture cap­i­tal firm Bedrock In­dus­tries.

The plan — which has sup­port from all ma­jor stake­hold­ers, ex­cept the union lo­cals that rep­re­sent the work­ers — will have a much bet­ter chance of gain­ing ac­cep­tance if on­go­ing ne­go­ti­a­tions with United Steel­work­ers lo­cals 1005 and 8782A and 8782B pro­duce col­lec­tive agree­ments be­fore the hear­ing.

Wil­ton-Siegel has said col­lec­tive agree­ments need to be in place be­fore he signs off.

Union lead­ers say that of the three con­tracts, the one for 1005 will be the most dif­fi­cult.

There are only 520 ac­tive mem­bers in 1005 but their votes rep­re­sent the in­ter­ests of more than 15,000 re­tirees who are up­set at hav­ing their pen­sion health ben­e­fits re­moved for the past 18 months and are skep­ti­cal about pro­posed plans for the fund­ing and man­age­ment of their ben­e­fits and pen­sions.

Also con­tentious is the fact that 1005 pen­sion­ers will be ex­pected to ac­cept 70 per cent of their health care ben­e­fits,

called other post-em­ploy­ment ben­e­fits — whereas Nan­ti­coke union mem­bers will get 100 per cent.

This is a re­flec­tion of the much higher ben­e­fit costs in Hamil­ton un­der the fund be­cause there are far more pen­sion­ers and fewer ac­tive em­ploy­ees.

But Wil­liam Aziz, chief re­struc­tur­ing of­fi­cer, said in a state­ment is­sued in April that “the plan and pro­posed re­struc­tur­ing trans­ac­tion with Bedrock In­dus­tries L.P. rep­re­sents the best — and only — out­come that bal­ances the re­al­i­ties of the sit­u­a­tion with the in­ter­ests of the many stake­hold­ers.”

The June 9 date was cho­sen, Aziz said, “to al­low am­ple time to reach and rat­ify agree­ments with the two USW lo­cals ahead of that date.”

But Gary Howe, pres­i­dent of Lo­cal 1005, dis­putes that.

“There are a lot of things to work out,” he said in an in­ter­view this week. “I think the whole thing needs more time.”

As well as the col­lec­tive agree­ments, he said, there are de­ci­sions to be made about the ad­min­is­tra­tive au­thor­ity over the pro­posed land trusts in­volv­ing the for­mer Hil­ton Works in Hamil­ton and Nan­ti­coke. Trusts need to be es­tab­lished to man­age health ben­e­fits, among other things.

The cur­rent ver­sion of the re­struc­tur­ing plan calls for Bedrock to con­trib­ute $80 mil­lion to­ward en­vi­ron­men­tal cleanup while land at both the for­mer Hil­ton Works in Hamil­ton and Lake Erie Works in Nan­ti­coke is rolled into a land trust, ad­min­is­tered by the prov­ince along with other stake­hold­ers. Stelco would be­come a tenant at both sites.

Only about a third of the 325 hectares at the Hamil­ton site would be used by Stelco, with plans by the prov­ince to re­me­di­ate and sell the un­used prop­erty to, in part, gen­er­ate funds for pen­sion plans and health care ben­e­fits.

“I sus­pect it will be pos­si­ble to get

I sus­pect it will be pos­si­ble to get an agree­ment at the Lake Erie Works. MARVIN RY­DER

an agree­ment at the Lake Erie Works,” said McMaster Univer­sity busi­ness pro­fes­sor Marvin Ry­der. “The ques­tion be­comes: What if Hamil­ton holds out?

“I’m not sure how the judge would pro­ceed. If he gets five of six pieces right, he might or­der some form of bind­ing ar­bi­tra­tion.”

Howe ac­knowl­edges that’s a pos­si­bil­ity and agrees that the pres­sure will be on for a 1005 col­lec­tive agree­ment if the lo­cal finds it­self to be the last hold­out in the re­struc­tur­ing deal.

HAMIL­TON SPEC­TA­TOR FILE PHOTO

Stelco has asked a Toronto court to set a “sanc­tion hear­ing” on June 9 at which a judge is ex­pected to rule on a deal with ven­ture cap­i­tal firm Bedrock In­dus­tries.

Newspapers in English

Newspapers from Canada

© PressReader. All rights reserved.