The Stel Salaried Pensioners Organization wishes to
thank The Hamilton Spectator for permission to post the following article by
Reporter Steve Arnold published in the November 19, 2005 edition
By Steve
Arnold
The Hamilton Spectator
(Nov 19, 2005)
Last-minute talks will continue through
the weekend in a desperate effort to forge a deal to save Stelco.
Negotiators for the company, its
bondholders and the Ontario government are searching for a way to meet the
bondholders' demand for $100 million, while still meeting the firm's need for
money for capital spending and to cover its massive pension shortfall.
A vote of creditors is scheduled for
Monday morning in Mississauga.
A similar vote last week was adjourned
after the company admitted its plan had no chance of passing.
"Discussions among stakeholders
are continuing," Stelco spokeswoman Helen Reeves said yesterday.
"These discussions will continue to achieve our goal of a consensual plan
until the last possible moment."
Company president Courtney Pratt also
promised in a letter to employees this week not to give up the effort.
"While we've been unable to
achieve consensus as yet, we'll do everything we can to achieve that goal until
the last possible moment," he wrote.
"We still believe that a consensual
plan offers the best outcome for the greatest number of stakeholders. We also
believe that such a result remains achievable if everyone wants it to
happen."
On the sidelines, leaders of the
company's employee groups can only watch and wait while the fate of their jobs
and pensions is decided.
"I'm sure it's going to be a long
weekend for them," said Rob Moffatt, spokesman for the salaried workers
association.
"The government needs to recognize
that we're down to the crunch now, that this is an opportunity to get a deal
and get it done."
On the table is a company proposal,
endorsed by the provincial government and unionized employees, that would
retire Stelco's $1.3-billion pension deficit over 10 years starting with a down
payment of $400 million.
A quarter of that down payment comes as
a loan from the province. Bondholders, who are owed about $275 million, want
the province to double its contribution, leaving $100 million of value in the
company for the bondholders.
"Public money is where the guns
are focused now," said union leader Bill Ferguson. "Talks are going
on as we speak. All we can do now is let them go through their process."
Moffatt said workers fear taking $100
million out of the company and increasing annual pension deficit payments would
leave Stelco vulnerable to the next downturn in the cyclical steel business.
"At least we know what the upper
limit of the bondholders' needs are," he said.
"The company and the employee
groups have done what they can and have come up with a good solution. Taking
$100 million out would degrade the company and leave us open to the next
downturn."
If Stelco's plan is defeated on Monday
and amended versions fail to win support, the next step would be a hearing
before Superior Court Justice James Farley on Friday that could result in an
order the company be liquidated, in the imposition of a court-ordered
restructuring or a union motion asking that the company be sold without
approval of the creditors.
A liquidation, observers have said,
would likely mean the sale of the modern and efficient Lake Erie plant and
closure for the old, uncompetitive Hilton Works plant in Hamilton.
Stelco's court-appointed monitor has
said in a liquidation the company's creditors would recover 17 to 33 cents for
every dollar they're owed, compared to 66 cents under the company plan. Stelco
owes its creditors about $640 million.
sarnold@thespec.com
905-526-3496