Local 1005 poised to oppose Stelco offer
Union questions whether pensioners will actually see benefits from deal with Bedrock
The union for Stelco workers and retirees in Hamilton is threatening to oppose the beleaguered steelmaker’s formal request to be sold to a new owner in court next week.
The company formerly known as U.S. Steel Canada filed a notice of motion in court Friday asking for approval of a long-brewing, government-endorsed purchase by Bedrock Industries.
It’s the latest significant step in a two-year, court-supervised effort to restructure and sell the Canadian arm of U.S. Steel. The U.S. parent company has also conditionally endorsed the deal along with the province and United Steelworkers Local 8782 and 8782 (B), which represent the company’s Lake Erie steelmaking plant.
But there is a “good possibility” Local 1005 will fight the motion when it comes up at a scheduled Thursday hearing in Toronto, president Gary Howe said on the weekend.
“At this point, we will probably oppose it,” said Howe, while noting local union leaders are still wading through hundreds of pages of newly released agreement details.
“What we see so far is smoke and mirrors. This is a good deal for the province and a good deal for U.S. Steel. For local workers and retirees, this is a lean deal at best.”
The agreement is meant to ensure operations continue at the Hamilton and Lake Erie mills, while retirees would continue to
receive unreduced, uninterrupted pension benefits, the province said in a release. Howe said local union leaders remain skeptical of this claim.
“If the stars align perfectly, maybe things turn out OK,” he said. “But there are no guarantees about what happens a few years from now … It feels like the province is just kicking the problem down the road.”
On the weekend, a Stelco spokesperson directed questions to a press release the steelmaker issued Friday. “Entering into a PSA (Plan Sponsor Agreement) with Bedrock is a major step forward as efforts to reach a going-concern transaction keep gaining momentum,” Bill Aziz, chief restructuring officer, said in the release.
“Constructive engagement from interested stakeholders is welcomed and appreciated. At Stelco, our focus continues to be on working with Bedrock and other stakeholders to complete the court-supervised restructuring, subject to various approvals.”
The province said Friday the would-be agreement should result in $430 million of eventual new funding for underfunded Stelco pension plans. That includes shares in a proposed “land trust” meant to ensure retirees benefit from the eventual sale and redevelopment of vacant Hamilton harbour land owned by the steelmaker.
Howe suggested there is a “disconnect” over how much the contaminated land is worth, despite a commitment within the deal to set aside $61 million in cleanup cash.
Coun. Sam Merulla, a member of the city’s steel committee, is critical of both levels of government and U.S. Steel for what he described as past “incompetence” in dealing with pension obligations. “Given what we’ve seen in the past, it’s understandable that (union members) would be skeptical,” he said. “But if the province has found a creative way of dealing with the issue, I think we’re obligated to try to make it happen … There aren’t a lot of other options.” Merulla suggested the steelmaker’s 328 hectares are “far more valuable than the average person would think,” contaminated or not. “We have close to a zero per cent vacancy rate in the (industrial) port as it is. That land is going to be in demand.”
The Hamilton Port Authority has indicated a past interest in snapping up at least some of the vacant land. On Sunday, spokesperson Larissa Fenn said the agency is “optimistic” and “ready to play a role, in whatever form that may take.”
“We represent a local, stable, and responsible steward of a portion of Hamilton’s waterfront,” she added.
Mayor Fred Eisenberger, however, reiterated on the weekend he’s not satisfied with the “inexcusable” lack of consultation with the city over plans for the industrial harbour land. “I do appreciate the effort (the province) is making to resolve this (U.S. Steel) issue, but there should be more consultation. These are decisions that will affect all taxpayers and future land uses in our city.”
... it’s understandable that (union members) would be skeptical. COUN. SAM MERULLA MEMBER OF CITY’S STEEL COMMITTEE