Stelco and union agree to disagree, negotiate

Stelco and union agree to disagree, negotiate

Stelco Inc.’s union, the United Steelworkers of America (USWA), has temporarily tabled its own restructuring plan in order to start another round of negotiations with the company. USWA’s bid to submit its own restructuring plan, developed by Tricap Management Ltd., was scheduled to be heard on Thursday (August 18) by Ontario Superior Court Judge James Farley, who has overseen the legally insolvent steelmaker’s restructuring since January 2004. Instead of proceeding with the hearing, the United Steelworkers Local 8782, which represents 1’000 employees at Stelco’s Erie Works steelmill, decided to resume talks with the Hamilton-based steelmaker. Bill Ferguson, president of Local 8782 told SteelOrbis that the union and Stelco have an agreement "to sit down and hammer out a deal,” but the Tricap plan is by no means out of the picture. Mr. Ferguson explained that the union reserves the right to petition the judge to reinstate the Tricap plan within 48 hours if they feel negotiations are no longer productive. Stelco's proposed plan, rejected by both the union and the Ontario government, pays its bondholders and other creditors the $665 million (CA$) they are owed in shares, and places a CA$200 million down payment into the CA$1.3 billion pension deficit. The union is seeking a plan that puts more money into the pension deficit; it favors the Tricap deal because it places CA$500 million directly into Stelco's pension deficit. Animosity between Stelco and the union had been mounting in recent weeks, with the union announcing a 90-day strike notice at Stelco’s Erie Works mill. Mr. Ferguson feels the 90-day deadline has actually been beneficial in bringing the two parties back to the negotiating table: “It certainly has worked better than a tap on the shoulder.” He is confident that things are moving in the right direction and that morale among workers at the mill is “solid and supportive.” The relationship between the union and Stelco’s bondholders is also tense. The bondholders recently filed court documents saying the union’s bid for their own restructuring contract was no less than an effort to destabilize Stelco’s restructuring and to drive it into liquidation. They do, however, agree with the union that Stelco’s proposed plan is unacceptable. In a statement released by Stelco, CEO Courtney Pratt said, "We continue to pursue a restructuring plan that is achievable, fair and reasonable for all stakeholders. Our goal remains the emergence of a viable and competitive Stelco at Lake Erie and in Hamilton."