The Stel Salaried Pensioners Organization wishes to thank The Hamilton Spectator for permission to post the following article by Reporter Mark McNeil, published in the June 29, 2005 edition

Time for Stelco reality check

By Mark McNeil
The Hamilton Spectator
(Jun 29, 2005)

The long, drawn-out restructuring of Stelco is entering a precarious phase with the breakdown of discussions between stakeholders and the resignation of mediator George Adams.

It will take formidable skill by Justice James Farley to keep the process moving forward when there are such fundamental differences between union representatives, bondholders and others.

In his usual folksy way, Farley told the quarreling stakeholders this week, "You may not like each other for various reasons, but as they say, if you don't all hang together you'll hang separately."

But what is also clear is that for the steelmaker to return to normal operations, everyone involved is going to have to take a hit. All will have to compromise. That's what happened with Algoma and Air Canada and it's really the only way to keep a company from going through actual bankruptcy or liquidation.

Now Farley is tightening the screws on the process to alert everyone that the status quo of court-supervised creditor protection needs to be brought to a close. He refused Stelco's request for a 2 1/2 month extension and gave the company until July 18 to come back to the court with a progress report.

The way the bankruptcy protection process is supposed to work is that teetering companies are given a temporary shelter from creditors while they sort out their problems. At the same time, creditors are forced to face the reality of the situation and recognize limited alternatives and the greater good.

But that's not happening with Stelco for some reason -- likely because unprecedented and temporarily high steel prices distorted perceptions of the company's true circumstances. Large quarterly profits created the illusion that a major restructuring was not really required.

But steel prices and profits are starting to weaken and now is the time for everyone to take a reality check, or as Farley said, an "extremely cold shower and reflect."