New Stelco chief sees HQ potential in Hamilton
The chief executive at Stelco sees the Hamilton-based steel company as the centrepiece in what could become a large empire of companies.
And Stelco CEO Alan Kestenbaum said he sees Hamilton as the place to headquarter that empire.
"We see tremendous future to building on this company by buying more companies," Kestenbaum said.
The first time the Florida-based Kestenbaum visited Hamilton when his Bedrock Industries fund was kicking the steelmaker's tires, he at first saw only steel mills.
But as he spent more and more time in the city, he began to see more — "really nice restaurants" and "young, urban professionals," many of whom, he realized, currently commute to Toronto for jobs.
He sees a talent pool that could be tapped into, he said.
"We've been reaching out to the community trying to hire people, successfully so," Kestenbaum said. "We're in a perfect place to build a headquarters and each time we do go and add pieces to Stelco, we're building a management team right now that's going to be capable of managing those other assets from Hamilton."
Kestenbaum spoke to CBC News as the first release of Stelco shares officially closed Friday. The company's initial public offering raised $230 million and gained almost 13 per cent on its first day of trading on the Toronto Stock Exchange.
Kestenbaum has talked about Bedrock's access to $2 billion in capital. So why take the company public now to raise that $230 million?
He said it's to be able to strike when a good deal on a potential acquisition comes open.
But for any Hamiltonians feeling burned by the last acquisition by U.S. Steel that led to three years of strife and shutdowns, Kestenbaum said he doesn't foresee any cut back in what the Hamilton and Nanticoke plants do.
"We actually see both the Hamilton and the Nanticoke areas as being great places, crown jewel places, and the cost structure that we have and the investments that we're putting in, I really see no prospects for ever curtailing anything there," Kestenbaum said.
He said he acknowledged a "buildup of mistrust" between the union and the company's management in the past, but said he hopes "confidence is being restored."
Indeed, Bedrock bought the company after the union representing Hamilton workers and retirees agreed to concessions, losing some of the pension security they counted on in exchange for some money put toward retiree benefits.
Local 1005 president Gary Howe has previously said the local would give the new company a chance to prove itself, but that many members remember painfully the promises made — and broken — when U.S. Steel bought the company a decade ago.