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
18, 2005 edition
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By Naomi
Powell
The Hamilton Spectator
(Aug 18, 2005)
Stelco will negotiate a pension bailout
with its union after months of deadlock.
Although the company has until now
refused to consider any restructuring plans or pension payouts other than its
own, Stelco CEO Courtney Pratt said yesterday that now "we are willing to
consider anything."
Five of six locals of the United
Steelworkers of America agreed to scrap their bid to submit a restructuring
plan by Tricap Management, an arm of Brascan Corp. The agreement followed a
series of meetings between the company, the union, provincial representatives
and the court-appointed monitor yesterday.
The monitor will appear in court today
to request an indefinite adjournment of the bid.
"We've had some very fruitful meetings,"
said Bill Ferguson, president of the union local representing Stelco's Lake
Erie workers.
"Negotiations are what we've
always wanted and it's finally happening."
Pratt would not say if the Tricap plan
was specifically being considered, but Ferguson said "everything's on the
table."
The truce comes at the 11th hour for
the steelmaker, which has three weeks left until its court-ordered bankruptcy
protection expires after more than 19 months. Although the company has so far
received eight extensions on its protection from creditors, Superior Court
Justice James Farley has called Sept. 9 a "real and functional
deadline."
Yesterday, Pratt was still confident
the company would file a restructuring plan to the court in time for the
deadline.
"I don't want to suggest that
we've got a deal done or a new deal brewing here," he said cautiously.
"The real movement here is that
we've got more constructive talks going on than we have in the past.
"You can certainly consider it a
good sign that the monitor thinks we should postpone this," Pratt added.
Today's postponement will be the second
for the union bid which was originally to be heard in a Toronto court on
Tuesday.
The Tricap plan proposes to put $500
million into Stelco's $1.3-billion pension deficit, paying the rest off in six
years.
The plan has also garnered the support
of the province, which has agreed to make an exemption to its legal requirement
that the deficit be paid within five years.
Ontario Finance Minister Greg Sorbara
refused to make the same exemption for the company plan, which proposed a
downpayment of $200 million, with the rest to be paid out over 10 years.
Sorbara called that proposal
"unacceptable."
Without these crucial exemptions,
Stelco would be forced to make annual payments in excess of $300 million, which
Pratt says it simply can't afford.
Pratt confirmed that the province was
part of yesterday's talks, which came after Farley warned that time was running
out for the steelmaker.
But despite Farley's warnings that the
flurry of rhetoric between stakeholders had better stop, several court
documents were filed late yesterday.
In one filing, the company's
bondholders accuse the union of attempting to destabilize Stelco's
restructuring and force it into liquidation.
In another filing, the union locals
claimed Stelco's board has fallen victim to a "conspiracy of financial
speculators."
In a final set, Local 1005 president
Rolf Gerstenberger, representing unionized workers at Stelco's Hilton Works in
Hamilton, argued his local does not support either the Tricap plan or the
company's restructuring proposal.
While supportive of the right of the
local unions to represent their interests as they see fit, the documents say,
Local 1005 says they don't have the right to propose a plan that might
"compromise of the rights and claims" of workers.
npowell@thespec.com
905-526-4620