Stelco lands would go toward pensions
Bedrock Industries is poised to take over a floundering U.S. Steel Canada, with the announcement Friday of a potentially historic purchase agreement, driving what some see as a spike of hope into the long dreary saga of Stelco’s decline.
But Mayor Fred Eisenberger, for one, has serious concerns. The City was shut out of the process, even though it has skin in the game.
Legal and union membership approvals must be secured. But the agreement document, some 4,000 pages long, was filed Friday in court, a start along the process. The deal, involving tens of millions of dollars and assurances around pensions, benefits and environmental remediation, is being hailed as a breakthrough by Ontario Finance Minister Charles Sousa.
The restructuring plan in the agreement enjoys the support of the United Steelworkers Local 8782 and 8782(B), United States Steel, Bedrock and Ontario, all subject to conditions.
Bedrock’s proposal would ensure the continuation of operations at the Hamilton and Lake Erie facilities. It would guarantee uninterrupted and unreduced benefits for retirees in Stelco’s four main pension plans.
The agreement, which also restores the once retired name of Stelco, puts steel company land in Hamilton into a pensioners’ trust. The government of Ontario will lend money against the appreciation of the land value in the amount of $76 million. This will
help shore up the benefits pool until the land value matures.
But, said Eisenberger, “It’s high time we get to work with the province and not have our waterfront designed by Toronto” and an outside company (Bedrock is American), that might not understand the city’s vision.
“It’s a positive step that the province is working to do good things for steel in this city but we’re concerned that they’re doing it in the absence of consultation.”
The agreement also stipulates that the company cover the province’s costs incurred over environmental rehabilitation of that land, to make and keep it viable, in the amount of $61 million.
“Ontario welcomes this latest development in the effort to restructure Stelco as an important step toward saving 2,100 local jobs, protecting pensions and supporting economic development in the Hamilton region while ensuring environmental protection,” said Sousa in a statement. “We are encouraged that the proposed agreement and plan filed in court today provides a solid foundation that would help facilitate the restructuring of Stelco. Stelco remains in court-supervised creditor protection proceedings under the Companies’ Creditors Arrangement Act,” said Sousa.
Stelco, formerly U.S. Steel Canada, has been operating under CCAA protection since being granted an initial stay of proceedings in September of 2014. The stay period was recently extended to March 31, 2017. Bedrock is a privately funded holding company.