BUSINESS

Union wants bigger role in sale of US Steel Canada, prepared to seek court order

06/17/2015 08:42 EDT | Updated 06/17/2016 05:59 EDT
TORONTO - The United Steelworkers union is demanding more information about potential bidders for U.S. Steel's plants in Hamilton and Nanticoke, Ont., which entered creditor protection last year for the second time in less than a decade.

The union says it's prepared to ask an Ontario Superior Court judge to require U.S. Steel to provide complete copies of letters of interest for the business formerly known as Stelco.

The union also wants to be allowed to have discussions with potential buyers at an early stage and see complete copies of bids.

That information is currently covered by non-disclosure agreements under a process supervised by Justice Herman Wilton-Siegel, with assistance from court-appointed monitor Ernst & Young.

Gary Howe, president of USW Local 1005 in Hamilton, said in an interview that the union played an active role in discussions in Stelco's restructuring, which lasted two years and concluded in 2006.

"Things were significantly different then for us," Howe said Wednesday from Hamilton.

"In that process, we met with different bidders. We knew who they were. We met with them individually, with the (court) monitor, and had discussions. That's what we did last time."

Howe said the union isn't supposed to know who is interested in buying the operation but "it's not hard to figure out, eh? They've got them touring in the plant."

Potential bidders had to express their interest by May 20 and have until July 10 to make binding offers.

U.S. Steel Canada's director of public affairs said in an emailed statement that confidentiality restrictions prevent him from commenting on specifics in letters of intent, but added there has been "substantial interest" in the business and its assets.

"As we progress through the second phase of the SARP (sales process), additional information will be made available at the appropriate time," Trevor Harris said.

U.S. Steel Canada has been under protection from the Companies' Creditors Arrangement Act since last September. The act is designed to give debt-ridden companies a chance to get a fresh start by reorganizing, a process that can involve the sale of some or all assets, contract renegotiations and refinancing.

As with the previous CCAA restructuring, the company's pensions and post-retirement benefits are among its biggest liabilities. When it bought Stelco in October 2007, U.S. Steel assumed responsibility for making $70 million a year of payments towards shortfalls in four defined benefit pension plans until December 2015.

The United Steelworkers union represents about 1,400 active employees at U.S. Steel Canada, 500 at Hamilton Works and 900 at Lake Erie Works in Nanticoke. In addition, there are 9,000 retired members in Hamilton and 670 in Nanticoke.

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