The Stel Salaried Pensioners
Organization wishes to thank The Hamilton Spectator for permission to post the
following article by Reporter Naomi Powell, published in the May 30, 2005
edition
By
Naomi Powell
The Hamilton Spectator
(May 30, 2005)
Mediation talks in Stelco Inc.'s restructuring will begin today,
marking a new chapter in the tense 16-month restructuring process that will
determine the steel giant's future.
Key stakeholders are to gather at a Toronto hotel this morning,
where mediator George Adams will attempt to forge an agreement on how the
insolvent steelmaker should pull itself out of bankruptcy protection.
This could be a Herculean task, since all parties in the process
have held widely different visions of how that process should play out.
"It's uncharted water," said Peter Liebovitch, vice-president of the
United Steelworkers' local representing Stelco's Lake Erie employees. "I
don't think anybody knows what's going to come out of this."
The talks are tentatively scheduled to wind up by June 5.
Although all other key stakeholders are poised to begin
negotiations, Rolf Gerstenberger, president of Local 1005 of the United
Steelworkers of America, refused to join in the mediation, calling the process
a "fraud" and "trap."
Local 1005's 3,000 active members have a contract with the company
that is valid until July 2006 and Gerstenberger believes the talks are designed
to break that contract.
He has also disputed whether a company as profitable as Stelco,
which posted record first-quarter profits of $49 million, should have been
granted protection under the Companies' Creditors Arrangement Act in January
2004.
"Although we would welcome Local 1005 coming to the table
with us, we respect the decision made by the leadership of the local,'' said
Bill Ferguson, president of the Lake Erie local.
Representatives from five other union locals and from USWA's
international office will be present today, along with debenture holders,
salaried retirees, salaried employees, the government and bondholders.
"I understand some of the bondholders are coming up from the
United States, so we'll finally get a chance to meet them face to face,"
Liebovitch said.
"It's exciting because at the end of the day it's really
between us and them. It's about how much goes to the bondholders and how much
to our pension plan."
The union and bondholders have long been opposed on how Stelco
should handle its $1.3 billion pension deficit. The union continues to back an
offer from Brascan-controlled Tricap Management Ltd., which would put $500
million into the pension deficit and $100 million toward Stelco's secured debt.
The bondholders have presented their own restructuring plan, which
is thought to favour their interests.
Last week, bankruptcy court Justice James Farley rejected a union
request to let Tricap complete the due diligence necessary to firm up its offer
and ordered all stakeholders to use the company's restructuring plan as the
starting point for today's talks.
npowell@thespec.com
905-526-4620