Stelco and union reach labor agreement

Stelco and union reach labor agreement

Friday night (September 23), two hours before Stelco’s bankruptcy protection was scheduled to expire, Canadian steelmaker Stelco Inc. and the United Steelworkers (USW) signed two collective agreements covering the workers at the company’s Erie Works plant. “Hopefully, we are passed this piece of Stelco's history,” said Bill Ferguson, president of the USW local 8782 representing 1’000 workers at the company's Lake Erie plant. Pleased that the two sides had finally ended their bitter contract battle, Justice James Farley signed papers to extend Stelco’s court protection until October 4. If Justice Farley had not granted this extension, the company's creditors could have immediately claimed hundreds of millions of dollars, destroying the company. Now that deals with the union and with financer Tricap Management LTD are complete, the Ontario government may loan the company $100 million (Canadian) needed to pull it out of insolvency. Before the government makes the loan, however, Stelco’s creditors must vote to approve the company’s restructuring plan, which would wipe out Stelco’s current shareholders and let new creditors become owners of the company. Current bondholders are strongly opposed, and observers foresee a class action lawsuit. Still, Stelco president and CEO Courtney Pratt remains optimistic. Friday he said, “The agreements will provide welcome certainty and stability for the company, our employees and customers, and the communities in which we operate.”