Judge: Stelco can move into exclusive negotiations with Bedrock
By declaring Bedrock the "successful bidder," the stage is set for more focused negotiations
Stelco can enter into an agreement to be acquired by Bedrock Industries, a judge ordered Thursday in downtown Toronto.
The court-appointed chief restructuring officer called the move "an important milestone" toward preserving about 2,100 jobs and coming "toward a solution that is the best possible for pensions and [benefits]."
- The battle over Stelco pension funds, explained
- Proposed Stelco sale to Bedrock filed with court, includes land sales to fund pensions
The judge, Justice Herman Wilton-Siegel, was not asked Thursday to authorize the definite sale of Stelco under the terms announced last Friday.
But by declaring Bedrock the "successful bidder," the stage is set for more focused negotiation of the issues still on the table, and sends a sign the company is willing to be bought. He made the declaration over the objecdtions of the city of Hamilton and the Hamilton union local.
The outline of a complex sale deal was announced last Friday. It includes selling land no longer needed for steelmaking operations, transferring environmental liability and paying off debt to U.S. Steel, the company's former parent.
All parties seemed to agree there's a lot of major work still to do before the plan is ready for the judge's stamp of approval. The province is in support of the deal.
But even though it's not final, the step taken forward Thursday leaves uncertainty for representatives of more than 13,000 pensioners and about 1,500 unionized active workers at the company's plants in Hamilton and Nanticoke, Ont.
'Time never assists in a transaction'
"Time never assists in a transaction," Wilton-Siegel said.
Those include pensions, benefits, the format for funding each and how the payments will be dispersed to other creditors. The creditors include the city of Hamilton, which opposed the motion Thursday.
Some parties are closer to resolving their issues than others.
"Once you get saddled with only one person to negotiate with, that puts you at a huge handicap," said Gary Howe, president of Local 1005, which represents about 9,000 retirees and 500 active workers.
More optimistic is Bill Ferguson, the president of Local 8782 in Nanticoke, representing about 700 retirees and 1,000 active workers.
Ferguson emphasized that his local's letter of support was written without agreements on pensions and benefits.
But he said he is moving forward and wants to negotiate.
"There's no guarantees," Ferguson said, "there's never any guarantees. But if you don't sit down and go forward, you're never going to find out."
1005: 'I'd say that we're a long ways apart'
Howe is especially concerned that the deal as proposed so far takes a 30 per cent reduction in the post-retirement benefits granted to the 1005 retirees, but not the 8782 retirees.
But he said he's willing to negotiate.
"We'll certainly give it another try to see if there's anything there," he said. "I'd say that we're a long ways apart when it comes to [benefits]."
"I don't see 8782 far apart at all" from the purchaser on negotiating its pension and benefits, Aziz said. "I see 1005 as holding their ground and hoping for more."
Aziz wouldn't speculate on their chances of getting that.
City objection
Also before the court Thursday, the city of Hamilton objected to being excluded from "any meaningful consultation and negotiation" about the deal, especially considering the city is owed back taxes and wants to weigh in on the sale of the waterfront lands contemplated as part of the deal.
Both the province and Bedrock have called the city, Aziz said, but haven't heard back.