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
13, 2005 edition
By Naomi
Powell
The Hamilton Spectator
(Aug 13, 2005)
Stelco's court-appointed monitor says
the filing of competing plans to restructure the steelmaker would not break the
"log-jam" between stakeholders.
The monitor's 34th report comes as a
war of words in Stelco's 19-month restructuring saga heats up.
The monitor, Alex Morrison of Ernst and
Young Inc., characterized discussions surrounding the company's restructuring
plan as "productive" and said further meetings would be advisable.
"If Stelco files a plan taking
into account its continued discussions with stakeholders ... it would be
appropriate for the plan to be subject to a vote of creditors," he wrote.
Stelco's restructuring plan has yet to
receive the support of any stakeholder and was rejected by the province earlier
this week for failing to adequately address the $1.3-billion pension deficit.
Ontario Finance Minister Greg Sorbara refused to provide any exemptions to the
steelmaker's legal obligation to settle the deficit in five years. The
obligation would require the company to make annual payments in excess of $320
million, a sum that would "swamp" the company, says CEO Courtney
Pratt.
In court documents filed yesterday, the
United Steelworkers called Stelco's plan "dead" in light of the
province's reaction and accused CRO Hap Stephen of misrepresenting a
union-backed plan by Tricap Management, an arm of Brascan Corp.
Ron Bloom, a special assistant to the
president of the United Steelworkers International, called the comments, most
made in an affidavit by Stephen, "inflammatory" and
"misleading." There is nothing in the Tricap plan, "that poses any
threat to the future of Hilton Works," he says.
"Mr. Stephen's assertion that
following the sale of assets, the entity that would emerge from Stelco would
not include all of Stelco Hamilton's facilities is a bald assertion backed up
with absolutely no evidence."
In the event of a sale of assets, Bloom
says Tricap would purchase all of the assets and assume all employment related
liabilities at Stelco's plants.
Five of six United Steelworkers locals
representing employees from Stelco's Lake Erie works and subsidiaries go to
court on Tuesday in an attempt to get the Tricap plan considered.
Usually in a restructuring process,
only the monitor, the company and its affected creditors are permitted to
submit a plan. Local 1005, representing Hilton Works employees, is not backing
the other locals. The union locals behind the Tricap proposal have argued the
pension shortfall qualifies them as Stelco's largest creditor.
Rolf Gerstenberger, president of Local
1005, has said the effort to be recognized as creditors could put pensions at
risk because the claims of creditors are subject to compromise.
The other locals prefer the Tricap
offer -- a promise of a $500-million downpayment on the pension deficit with
the balance settled over six years. The company plan would put a maximum of
$200 million into the deficit, settling the entire debt by 2016.
npowell@thespec.com
905-526-4620