Hamilton steel company gets 12 more days to try to stay alive
'This is the most pressure I’ve ever been under': Steelworkers union negotiator
A beleaguered Hamilton steel company won a last-minute reprieve from liquidation on Wednesday as a judge granted a 12-day extension to get a deal on the table to keep the company going.
Speaking to a crowd of lawyers and nervous steelworkers, Superior Court Justice Glenn Hainey wished the union negotiators and potential buyer well.
"He wished us good luck," said Tony DePaulo, assistant to the United Steelworkers director that oversees Ontario. "He said, 'I hope you can pull this off.'"
This is the most pressure I've ever been under.- Tony DePaulo, assistant to United Steelworkers District 6 director
The company, Hamilton Specialty Bar, has been in trouble since January, when its doors were suddenly shut and its operations sent into a receivership under the control of a trustee.
The first week of January, company executives told the union, United Steelworkers Local 4752, that they had a "cash flow problem" and wouldn't be running.
The court-appointed receiver called back 170 unionized workers to crank out orders for the company's top three clients left in the lurch by the news of the shutdown.
Those orders ran out in February and the majority of workers have been temporarily laid off while they await news of the company's future.
New York company shows 'tremendous interest' in keeping company running
New York-based firm KAL Advisory Partners came to discussions about buying the company late and has showed "tremendous interest" in keeping the company going, DePaulo said.
"They've been working around the clock," he said. "They've done in two weeks what ordinary buyers would take three months to do."
DePaulo also praised the firm's willingness to kick the tires at a time when American steel tariffs were threatened to apply to Canadian steel.
Short timeline to make it work
This isn't DePaulo's first time in court with a troubled steel company; he's been through both Stelco restructurings and is currently involved in the Algoma saga in Sault Ste. Marie.
But this deal skipped the restructuring protections of the Companies' Creditor Arrangement Act (CCAA) and went straight to a receivership with a shortened timeline.
"This is the most pressure I've ever been under," DePaulo said. "I'm not very happy about how this all transpired."
Near the top of the agenda for the next two weeks is something called a "Dutch auction" in which the potential buyer will go to the company's former customers and ask what they'd be willing to commit to buying from Hamilton Specialty Bar.
With those commitments in hand, the company can then apply for financing and figure out how big the workforce would need to be to make that much product.
Union negotiations to come
The union and the potential buyer will have a chance to sit at a negotiating table and try to make things work.
DePaulo said it's too early to know what concessions the unionized workers would be asked to make.
"You can't pay minimum wage to people making steel, but you know what? We're going into this optimistically."
Beyond the unionized workers, most of whom have now been laid off, the company also employed about 50 salaried workers. Another 400 retired workers and their families are also affected by what happens to the company.