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 August
11, 2005 edition
By Naomi Powell
The Hamilton Spectator
(Aug 11, 2005)
Stelco says a union restructuring
proposal puts its largest group of employees at serious risk and is designed to
break the company apart in pursuit of a political agenda.
The allegations throw fuel on the
increasingly heated conflict between the company and its unionized employees.
In court documents filed yesterday,
Stelco's chief restructuring officer Hap Stephen characterizes a union-backed
plan by Tricap Management as "little more than a thinly disguised strategy
to attempt to cause the CCAA restructuring process to fail and to cause a
court-ordered sale of Stelco's assets."
Stelco chief executive officer Courtney
Pratt called the union plan "very, very dangerous."
"The USW International is driving
this and it could be very risky for the company." The matter goes to court
Tuesday.
Stelco will oppose the union's effort
to have the refinancing bid from Tricap, an arm of the Brascan Corp., approved.
The union plan is backed by five of six
United Steelworkers of America locals that represent Stelco workers at its Lake
Erie and subsidiary operations. It also has the support of the United
Steelworkers International (USWI), the international branch of the USWA.
The union and company disagree over how
to handle Stelco's $1.3 billion pension deficit. The union plan suggests a $500
million payment into the pension shortfall, paying the rest out over six years.
The Stelco proposal calls for a maximum
of $200 million put toward the deficit with the rest paid out over 10 years.
Stephen says the Tricap plan is crafted
to advance a desire by Ron Bloom, special assistant to USW International
president Leo Gerard, to consolidate the North American steel industry.
Consolidation is a process in which smaller steel mills like Stelco are often
broken up in pieces and absorbed by larger companies.
As evidence, Stephen points to an
affidavit by Bloom in which he states a court-ordered sale of Stelco could be
acceptable to the union.
"In a sale process you have no
control over who buys you," Pratt said. "The agenda here is for
consolidation. It's a stated agenda. But consolidation calls for the strong
players to survive and the weak players not to survive and that could create
serious concerns for Stelco's Hamilton mill."
The company says its Hamilton Hilton
works is one of the least competitive steel mills in North America and might
have difficulty attracting a buyer, resulting in a sale of its assets. A
court-ordered sale would drain the company of resources and cost it valuable
customers and suppliers, it says.
"This is completely out of left
field," said Bill Ferguson, president of the USWA Local 8782 representing
about 1,000 Lake Erie employees.
"Why would the international union
go out of its way to get rid of 3,000 members? Brascan has said all along they
are prepared to buy the entire company and they are prepared to do that
now."
Rolf Gerstenberger, president of USWA
Local 1005 representing Stelco's Hamilton employees, has refused to participate
in the restructuring process which he has called "legalized theft"
set up to get concessions from workers. However, he has also refused to support
the Tricap plan.
"We're not interested in helping
one venture capitalist over another to get control of Stelco," he said in
an interview.
The company has said that without the
support of Local 1005, the International union represents a minority of
Stelco's employees who have claims to 10 per cent of the overall pension
deficiency.
On Tuesday, Stelco's restructuring plan
was criticized by the province for not fully addressing pension concerns.
Finance Minister Greg Sorbara said the
Stelco plan was "not acceptable" and refused to exempt the company
from its legal obligation to settle the deficit in five years. This would mean
making annual payments in excess of $300 million, a sum Pratt said would
"swamp" the company.
Although the province has shown favour
for the Tricap plan, the company has criticized it as heavily favouring the
union over Stelco's unsecured creditors.
npowell@thespec.com
905-526-4620