Province backs Bedrock bid for U.S Steel Canada
The agreement is the most recent step in the effort to find a buyer for the struggling steelmaker
The government of Ontario is backing a bid by American company Bedrock Industries Group to buy U.S Steel Canada.
The province put out a release early Wednesday saying it had signed a memorandum of understanding with the company.
While the details of the memorandum are not being released, the province says the deal "advances (the) process to save jobs, industry and pensions in Hamilton and at Lake Erie."
We are encouraged by many aspects of the agreement announced today.- Marty Warren, USW Ontario Director
The provincial release says the bid from Bedrock is "intended to protect pensions and assist in providing post-employment benefits."
The United Steelworkers union (USW), which said it had been briefed on the bid, said it included the continued operation of both the Hamilton and Lake Erie plants.
The deal also contains some agreement by the province to "support the development of industrial lands" on behalf of pensioners. There's no elaboration of what that means.
But the USW, which represents workers at both Hamilton and Lake Erie plants offered some early support for the bid.
"We are encouraged by many aspects of the agreement announced today between the Ontario government and Bedrock Industries," Marty Warren, USW Ontario Director said in a press release.
"The deal announced today is far from perfect," said Warren, "given the challenges that arise from such a lengthy and complex insolvency process."
"However, after two years in CCAA protection and after numerous discussions with other bidders, we believe this could lead to a good final deal for the union's members and retirees."
Local 1005 members will want to know in simple terms will their Pension Plan be fully funded in 5 years.- Gary Howe, USW Local 1005
For Local 1005, which represents workers at the Hamilton facility, the reaction was more cautious.
Its release stresses that it "does not have an agreement with Bedrock Industries." It also reiterates the union's position that the Ontario government bears responsibility for their pensions. And it restates its bottom line for evaluating any sale deal:
"Local 1005 members will want to know in simple terms will their Pension Plan be fully funded in 5 years as the law states? No tricks."
U.S. Steel Canada has released a statement that called the agreement an "important step" in its restructuring process.
The statement says it "welcome[s] this constructive engagement from the parties that have negotiated this MOU."
The company noted its ultimate goal was a "going concern transaction that will allow U. S. Steel Canada to complete the restructuring process and continue manufacturing and delivering high-quality steel products over the long term."
U.S. Steel Canada is currently under bankruptcy protection and through an ongoing court supervised process is trying to restructure and find a buyer.
A statement from the office of Hamilton Mayor Fred Eisenberger called the agreement "welcome news in Hamilton." It said that sustaining jobs, pensions, and benefits for current and former steelworkers is "of the utmost importance to our community."
This latest development comes two years after U.S. Steel Canada entered bankruptcy protection, leaving thousands of its employees in a precarious situation.