HAMILTON, Ont. — The United Steelworkers unio says it will do everything it can to get the best outcome for workers and retirees at U.S. Steel Canada, the former Stelco Inc., now restructuring under court protection.
For now, its business as usual at operations in Hamilton and in Nanticoke, Ont., after U.S. Steel Canada announced late Tuesday that it had been granted creditor protection under the Companies Creditors Arrangement Act.
once again U.S. Steel has left thousands of families and entire communities in limbo, Ken Neumann, national director of the United Steelworkers, said Wednesday.
They will have to endure a long and complex court process. We will work together with other stakeholders to seek the best outcome for our members and retirees, Neumann said in a statement.
Under the creditor protection arrangement, U.S. Steel Canada will look at selling all or part of its assets that it acquired for $1.1 billion in 2007, when Stelco went through the same process.
The former Stelco Inc., which U.S. Steel bought in 2007, has recorded a loss from operations of about $2.4 billion since 2009.
Pittsburgh-based U.S. Steel has said it will provide the two Canadian steel mills with $185 million of secured debtor-in-possession financing to support current operations through the end of 2015.
The president of United Steelworkers Local 1005, Rolf Gerstenberger, said that workers have suspected for quite a few months that something was going to happen here.
The members concern is basically that theyre wondering if the place is going to be running, Gerstenberger told CHCH television in Hamilton. The other is whats going to happen to their wages, benefits and their pensions.
The two steel mills have about 1,800 workers and there are thousands of retirees.
Gerstenberger noted the steel industry hasnt really been able to recover from the economic crisis that hit in 2008.
Were the collateral damage to the U.S. Steel empire.
ontario Economic Development Minister Brad Duguid says the governments hope is that the company will have the time it needs to restructure and a plan to help save jobs. A $150-million loan from the ontario government to help finance workers pension payments is due at the end of 2016.
The creditor protection announcement doesnt come as a total surprise, Duguid said.
You see the numbers, he said. The company has been losing money for five years straight. Their assets and liabilities are far out of whack. Its not a sustainable business model right now.
The loan was the right thing to do at the time, Duguid said, but the government will be watching the solvency protection process very carefully.
U.S. Steel Canada said late Tuesday that despite efforts over the past several years to make U.S. Steel Canada profitable, restructuring is needed.
Michael McQuade, president and general manager of U.S. Steel Canada, said that for the restructuring to be successful, the process will require innovative solutions that will create a restructured business able to compete in the North American market.
Operational changes, cost reduction initiatives and streamlining of operations cannot on their own make it competitive in the current environment. Entering CCAA was the only responsible course of action under the circumstances and it was taken only after all other options were thoroughly explored, he said.
Meanwhile, the United Steelworkers also criticized the Harper government for the hardship U.S. Steel continues to cause in Canadian communities.
The unio is calling on the federal government to disclose the terms of the agreement under the Investment Canada Act by which it approved U.S. Steels purchase of Stelco.
