Sep 09, 2015 | Vote 0 0

Government moves to avoid U.S. Steel pension collapse








John Rennison,The Hamilton Spectator

Sources confirm the meeting with an unnamed bidder for the U.S. Steel Canada operations has expressed interest in resuming steelmaking operations in Hamilton.



Hamilton Spectator
By Steve Arnold


The Ontario government is meeting this afternoon with a potential bidder for the former Stelco plants in Hamilton and Nanticoke in a move to protect taxpayers from hundreds of millions of dollars in pension plan shortfalls.

Sources confirm the meeting with an unnamed bidder for the U.S. Steel Canada operations has expressed interest in resuming steelmaking operations in Hamilton.

That's a critical factor for the Ontario government. If the former Stelco plants remain in operation, producing revenue and profits, Queen's Park will be saved from having to rescue 14,000 local pensioners who face sharp cuts to their retirement income if the company goes out of business.

Sources familiar with the situation, who asked for anonymity because they are not authorized to speak publicly, said the meeting is to discuss a number of issues around the sale of USSC assets, including how the badly under-funded pension plans will be handled.

One idea to be discussed is appointing an interim manager for the plan until USSC's restructuring under court-supervised creditor protection is complete. Other sources say the discussion is around management of the pension funds after a sale of the assets.

Tuesday's meeting is ahead of a gathering of unionized Stelco/USSC retirees slated for Wednesday to decide if workers should negotiate a pension settlement with the company.

Gary Howe, president of Local 1005 of the United Steelworkers union, said the security of the pension plans remains the union's top priority in USSC's restructuring.

"The big question for us right now is that the province hasn't committed to anything," he said. "Our priorities are still jobs, the pension plans and the OPEBs (other post-employment benefits)."

Watch thespec.com for updates

Used to live just down the QEW from the Hammer in Mississauga. STELCO was a field trip for many school students back in the day. We would tour the site, and see the steel making process from delivery of raw materials, to seeing them pour out molten ingots that got rolled out in nearby finishing plants.

Like a lot of the U.S. 'rust belt', Canadian steel making fell victim to financial market pressures. I knew a man who had been a union negotiator back in the late 70's, and who did such a good job that STELCO eventually lured him onto their side of the table. It was cheaper to pay him than to face him was their thought process. lol

I recall that the company always had these huge Christmas parties that were an 'event' such that they always got a lot of press. I don't know the particulars of how the pension plan got so fragile, but it seems that everyone had a ton of money back in the day. Both the company and the employees. It's sad to think these old guys who legitimately can be considered people who built the country from the ground up, could find themselves struggling financially late in life.