Steel Mills

Conditions Getting Dire for U.S. Steel Canada

Written by Sandy Williams

U.S. Steel Canada is seeking a court order that will allow it to continue the restructuring process beyond this year. Without the order, the company says it would have to cease operations at the end of 2015.

“With a Court Order we can preserve work and meet obligations to approximately 2,200 employees and continue to deliver high-quality steel products to our customers from our two Canadian steelmaking facilities,” said Michael McQuade, President and General Manager of U.S. Steel Canada. “The Court Order, if granted, would also provide additional time to find a consensual restructuring solution, and to conduct a new Sale and Restructuring Process when market conditions improve.”

U.S. Steel has asked that the current Sale and Restructuring Process (SARP) be discontinued immediately, except for the sale of land at Hamilton Works, with the intention of restarting it again later in the year or in 2016.

“Despite U.S. Steel Canada`s best efforts under its Sale and Restructuring Process, the unwillingness of stakeholders to agree to compromises proposed in the offers submitted, and the unwillingness of bidders to modify their conditions to be acceptable to stakeholders, has resulted in no executable offer being received to-date,” said the company in a press release.

USSC has also asked that parent company US Steel be required to provide all intercompany services and goods.

In order to conserve cash for the survival of the business, U.S. Steel Canada has requested, “with great regret,” the immediate suspension of all pension funding contributions except those for current service. Current retirees and spouses will continue to receive checks from the registered pension plan but supplementary funds paid directly from U.S. Steel Canada would be suspended.

Health, medical, dental and life insurance benefits would also be cut off in the near term for retirees, surviving spouses and dependents.

U.S. Steel Canada has, additionally, requested that all real property tax payment be suspended immediately.

The request for relief was prompted in part by U.S. Steel’s decision by to move critical production supplied to the auto industry from the Canadian mills to the United States, beginning in October 2015. The United Steelworkers are seeking a court order to stop the production move, calling US Steel’s plans “illegal” and urging the court to “stop them in their tracks.”

“U.S. Steel has hit a new low with its latest threats to our Canadian operations and its obligations to our workers, pensioners and communities,” said USW Ontario Director Marty Warren.

“There is no justification for U.S. Steel to be diverting our high-value production out of Canada,” said USW Local 8782 President Bill Ferguson. “It’s an artificial, contrived plan to threaten workers and pensioners. It’s designed to give the company leverage to force us to bend to their will under duress.”

A three-day mediation session is scheduled to begin next week to discuss the shift in production as well as U.S. Steel’s debt claim and the restructuring and sale of the Canadian assets.

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