Time running out for insolvent Stelco

Time running out for insolvent Stelco

The Canadian steelmaker Stelco, Inc. has been granted only 10 more days of bankruptcy court protection before it must head back to the bargaining table. Stelco had originally petitioned the court for protection until September 27, but then compromised for a date in mid-August after the United Steelworkers of America vigorously fought the motion. Ontario Superior Court Justice James Farley has now chosen to ignore the court-appointed monitor Ernst and Young’s recommendation for the longer “cooling off” period. Farley has given Stelco until July 18. Stelco must “step up to the plate and support its own future” Bill Ferguson, president of USWA Local 8782 said today. Attempts at negotiating the 17-month long restructuring saga dissolved spectacularly, June 24, when the court-appointed mediator and retired Ontario Judge George Adams quit. At the heart of the matter is the issue of CA$1.3 billion in pension fund deficits. The union and Stelco have not been able to find agreement on how the deficit will be made good. Time is running short for the company which faces yet another looming labor dispute at its Lake Erie facility, where its thousand employees have been working without a contract for about a year and may strike soon. The Lake Erie plant primarily produces hot-rolled steel for use in the automobile industry. Meanwhile the public relations debacle drags on for the company as the various press outlets and the union, no longer under the mediator’s gag order, are taking every opportunity to showcase the company’s plight.