Steelworkers union firm on ‘holy trinity’
Leaders of the United Steelworkers vow to oppose any bid for the former Stelco that doesn’t answer their priorities of jobs, pensions and retirement benefits.
In separate communications Monday the presidents of the union’s Hamilton and Nanticoke locals repeated their long-standing position that those three points are not open to negotiation.
In an update bulletin posted to the website of Hamilton’s Local 1005, president Gary Howe promised “We will continue to meet with any and all bidders to discuss solutions for a successful restructuring that has our jobs pensions and (retirement benefits) kept intact.
Howe added that talks with potential owners of the former Stelco has been going on for 20 months and “(w)e have told them as recently as a week ago our position has not changed — jobs, pensions, (retirement benefits) and that we would like to find a solution that address our priorities.”
Bill Ferguson, president of Local 8782 at the Lake Erie Works, added in a video message that talks continue with all players in the complicated restructuring of U.S. Steel Canada.
“We are talking to three bidders along with all the other players, the province and everyone else involved in this,” he said. “We are still in talks and we are still having conversations about this.”
U.S. Steel Canada has been given court permission to stop making some payments into its pension plans, to stop paying retirement benefits (also called Other Post Employment Benefits or OPEBs) and municipal property taxes.
Recent reports in The Spectator and other media, citing anonymous sources, have identified two bidders as still in the running to purchase Stelco — Essar, the India-based industrial group recently knocked out of the bidding for Algoma in Sault Ste Marie, and New York-based hedge fund KPS Capital Partners LP.
KPS was recently identified as the preferred bidder for Algoma, also in creditor protection. Sources say the fund intends to merge Stelco and Algoma into a new Canadian steel company.
In his video, Ferguson specifically said there is a third bidder still in the running, but did not identify the company. He also said other potential bidders have been “misidentified.”
Participants are bound by a confidentiality agreement not to discuss bids or the process.
The KPS bids for both companies are said to be contingent on unspecified “support” from the provincial government and new collective agreements from the union.
Ferguson made it clear the union’s support depends on a bidder’s action on the “holy trinity” of jobs, pensions and retirement benefits.
“The union has a functional veto in this, and those conversations have not happened yet,” he said.
Sources have previously suggested another hedge fund, New York-based Bedrock Industries LP, is the third bidder.
Binding offers for U.S. Steel Canada are being evaluated by the company and its advisers. Any recommendation they make requires court approval and a negotiated restructuring plan with creditors, including the union and U.S. Steel of Pittsburgh — the sole owner of the former Stelco and also its largest secured creditor.