The Stel Salaried
Pensioners Organization wishes to thank The Hamilton Spectator for permission
to post the following article by Reporter Steve Arnold published in the April
19, 2005 edition
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Apr. 19, 2005. 12:59 AM |
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MPPS Urged to Enter Stelco Fray |
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Unions push to have Brascan offer considered |
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By Steve Arnold |
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City and provincial politicians are being enlisted in the union drive to
refinance Stelco. Hamilton East MPP Andrea Horwath has circulated a motion to the city's
other MPPs calling on them to urge the provincial government to press Stelco
to at least consider the $1.35-billion package offered by Toronto-based
Brascan Corporation and the United Steelworkers of America. At the local level, union leaders plan to take their request for aid to
the city planning and economic development committee today. They are hoping
the city will mount a similar effort to push Stelco to consider the Brascan
proposal. Horwath's resolution calls on the provincial government, Premier Dalton
McGuinty, steel industry adviser James Arnett and others to "urge Stelco
to reconsider its initial rejection of the USWA and Tricap proposal and begin
working with them and all stakeholders to recapitalize Stelco and begin to
address some of the company's serious pension deficiencies." "I hope we can deal with this in a nonpartisan way," Horwath
said. "I hope it will be a joint kind of thing. I hope the Liberals will
stand up for this community." In a package announced last week, Brascan offered Stelco $1.35 billion to
solve its financial problems. The package would give Stelco access to $950
million in new debt as well as backstop a new equity offer. The money would
be used to top up Stelco's underfunded pension plans by $500 million as well
as to finance desperately needed equipment and plant upgrades. Stelco immediately rejected the proposal, saying it has its own plans to
raise money in the capital markets. It also refused to allow the union to name Brascan as a financial adviser
-- a move needed to allow the union to share the financial secrets it gained
from Stelco under a confidentiality agreement. Five of Stelco's six USWA locals back the Brascan proposal. They plan to
go to court in Toronto Thursday in an effort to force Stelco to allow the
appointment. Local 1005, which represents workers at Hamilton's Hilton Works, does not
back the Brascan plan. Yesterday, Local 1005 president Rolf Gerstenberger circulated a letter to
his 11,000 active and retired members warning them to beware of 'capitalists'
bearing gifts -- cautioning there may be hidden costs to the Brascan offer. "We aren't now so naive as to believe that (Brascan) is willing to
invest $1.35 billion into Stelco and wants nothing in return from the
workers," Gerstenberger wrote. "The position of Local 1005 remains the same -- no matter what
arrangements Stelco makes and with whom, we expect the terms of our contract
to be honoured ... We harbour no illusions that the workers will find a
saviour outside their own struggle in defence of what's theirs by
right." Even the much-discussed pension top-up isn't cause for excitement, he
added. "When we read that some vulture capitalists are prepared to invest in
Stelco and are willing to put in $500 million into the pension fund, an
impression is created that someone is doing us a big favour," he wrote.
"This is far from the case. We create every penny -- that the investors
siphon off -- for the pension fund. In fact, the workers have the first claim
on the wealth they create at Stelco." sarnold@thespec.com 905-526-3496 |