Bedrock deal closer with union pact

Takeover plan for Stelco re­quires con­tract in place

The Hamilton Spectator - - FRONT PAGE - MARK MC­NEIL

The fi­nal pieces of a com­plex deal to re­struc­ture Stelco with a new owner are fall­ing into place with the an­nounce­ment Thurs­day of a ten­ta­tive agree­ment for Lake Erie union mem­bers and a “frame­work of an agree­ment” for Hamil­ton work­ers.

The de­vel­op­ments are sig­nif­i­cant be­cause pre­sid­ing Jus­tice Her­man Wil­ton-Siegel has said col­lec­tive agree­ments with the unions need to be in place be­fore he will en­dorse the takeover plan by Amer­i­can ven­ture cap­i­tal firm Bedrock In­dus­tries.

That plan is sched­uled to be pre­sented to the Toronto judge on June 9. A ju­di­cial en­dorse­ment would kick in a 21-day process to pass on the com­pany to Bedrock, end­ing more than two and a half years of cred­i­tor pro­tec­tion un­der the Com­pa­nies’ Cred­i­tors Ar­range­ment Act (CCAA).

“We’ve reached a ten­ta­tive deal with Bedrock In­dus­tries,” said Bill Fer­gu­son, the pres­i­dent of United Steel­work­ers Union Lo­cal 8782 (a) and 8782(b), which rep­re­sents work­ers in Nan­ti­coke.

A “moun­tain of pa­per­work” lies ahead, Fer­gu­son said. “But we have a deal and we want to move for­ward with it with the mem­bers and to vote on this of­fer.”

Union mem­bers will vote May 30-31. De­tails of the ten­ta­tive agree­ment are be­ing with­held un­til then.

“It’s been a long road and we fi­nally got there. We just set­tled up (Thurs­day) af­ter­noon,” Fer­gu­son said.

The two 8782 lo­cals have a to­tal 1,100 mem­bers with about 800 re­tirees. Lo­cal 1005 in Hamil­ton has more than 500 ac­tive mem­bers with 15,000 pen­sion­ers.

The 1005 bar­gain­ing com­mit­tee said in a state­ment Thurs­day it ex­pects to present a ne­go­ti­ated agree­ment to its mem­ber­ship next week.

“Cur­rently, we are work­ing on a frame­work for an agree­ment which we are plan­ning to present to the mem­ber­ship next week. Dates, times and lo­ca­tion of (the) mem­ber­ship meet­ing (is) to be de­ter­mined.”

The three para­graph state­ment said dur­ing the ne­go­ti­a­tions “our pri­or­i­ties re­mained the same, jobs, pen­sions and OPEBs (other postem­ploy­ment ben­e­fits).”

Gary Howe, the pres­i­dent of the lo­cal, said no fur­ther com­ment would be made.

A spokesper­son for Stelco could not be reached.

McMaster busi­ness pro­fes­sor Marvin Ry­der says of the two unions, 1005 has the most dif­fi­cult is­sues.

For one thing, be­cause of the large num­ber of 1005 re­tirees, the com­pany has said it is will­ing to fund only 70 per cent of costs of OPEBs, whereas work­ers as­so­ci­ated with 8782 lo­cals were to re­ceive 100 per cent.

As well, 1005 of­fi­cials are skep­ti­cal about pro­posed plans for the fund­ing and man­age­ment of their ben­e­fits and pen­sions.

But the com­pany has been press­ing that time is run­ning out. In mo­tion doc­u­ments from May 16, it pointed to a col­lec­tive agree­ment with Lo­cal 1005 as be­ing one of the fi­nal ob­sta­cles and “... if such sup­port is not forth­com­ing, Stelco will re­quire a brief pe­riod of time to con­sider other al­ter­na­tives, in­clud­ing a liq­ui­da­tion.”

But Ry­der said he can’t imag­ine every­one giv­ing up on a deal that has come so far if there is still prospect of a col­lec­tive agree­ment be­ing reached.

“I think the judge would be will­ing to ex­tend the cred­i­tor pro­tec­tion for an­other month if both sides asked for a lit­tle more time,” he said.

A key pro­vi­sion of the plan calls for the steel­maker’s prop­erty to be made into a land trust un­der pro­vin­cial author­ity, with Stelco be­com­ing a ten­ant on about a third of the 325 hectares in Hamil­ton.

Then the un­used land would be re­me­di­ated and sold or leased to raise funds to help Stelco pen­sion plans stay sol­vent in the face of hun­dreds of mil­lions of dol­lars in un­funded li­a­bil­ity, as well as pro­vid­ing some fund­ing for health- care ben­e­fits for re­tirees.

But union of­fi­cials are skep­ti­cal the land can be turned into some­thing of value in the short term.

Re­tirees are fear­ful of hang­ing their for­tunes on the scheme.

I think the judge would be will­ing to ex­tend the cred­i­tor pro­tec­tion for an­other month… MARVIN RY­DER MCMASTER UNIVER­SITY


A pro­vi­sion of the re­struc­tur­ing calls for un­used land to be re­me­di­ated.

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