Welcome Back, Stelco

[lucasmascotto]

This sounds like a bit of an unpopular opinion but do we really need to revive the steel industry in this city?

[interr0bangr]

Originally Posted by lucasmascotto

This sounds like a bit of an unpopular opinion but do we really need to revive the steel industry in this city?

Nope. Super disappointed with this news. Wish we could blow up all the steel mills here, reclaim the waterfront and invest in cleaner and more sustainable industries.

[Beedok]

Originally Posted by interr0bangr

Nope. Super disappointed with this news. Wish we could blow up all the steel mills here, reclaim the waterfront and invest in cleaner and more sustainable industries.

You've go to make steel somewhere, I'd rather know my steel was coming from somewhere with Canadian safety standards and environmental regulations than somewhere like the US or China. Obviously we should push to make them cleaner and safer still, but we've only got one planet and pollution in China still affects Canada.

[Jon Dalton]

I hope the steel mill stays. Art isn't the new steel. Steel is the new steel. There simply isn't another material with the manufacturability combined with durability and strengh to weight ratio of steel. That's why we put up with rust.

It would take 100 years and billions of dollars to clean up the Stelco lands for anything other than industrial. The best possible outcome is that steel production resumes and the excess lands are bought and developed for other cleaner industrial uses. I'd like to see a renewable energy industry develop in Hamilton that would compliment the steel industry.

[flar]

Those steel mills are an important resource for Canada. Steel is a major staple, I'd hate to see our capacity reduced permanently, and for us to become completely dependent on foreign sources.

[markbarbera]

Originally Posted by Jon Dalton

I hope the steel mill stays. Art isn't the new steel. Steel is the new steel.

I like that. Steel is the new steel.

[ScreamingViking]

Originally Posted by lucasmascotto

This sounds like a bit of an unpopular opinion but do we really need to revive the steel industry in this city?

On the one hand I see so much opportunity (at great cost and effort) to do something with all that land. So I get your point.

On the other, another steel company taking over has a lot of positives too - taps into an existing pool of skilled labour, and may have benefits for the Stelco pensioners who have been in limbo with U.S. Steel; preserves a lot of existing tax revenue for the city (not to mention what the plants pay for water and energy use); preserves activity for existing industries all along the supply chain that rely on the steel making; it would likely minimize the need for government investment, at all levels, in these lands. Plus there may be opportunities to redevelop some of that huge tract into other employment use, if USS carves it up for sale.

But I have to wonder why USS would want to sell to a competitor. They've been playing games with their Canadian holdings since almost the beginning of their tenure here, which has likely benefited their American production facilities. It doesn't make sense to me that they'd willingly sell to Essar, even if they have the best bid.

[ScreamingViking]

This Spec story contrasts USS and Essar (and also provides a bit of balanced perspective on the latter). There's more in the linked story than I've pasted here, particularly regarding labour relations.


Essar has been to the Sault everything that U.S. Steel has not to Hamilton
Hamilton Spectator - Aug 15, 2015
By Steve Arnold

Call it a tale of two steel companies.

One has a record of broken promises, shuttered plants and labour relations based on confrontation. The other has a legacy of investment in a struggling company, expansion and a deep commitment to its community.

The contrasts between Essar Steel, of India, and U.S. Steel, of Pittsburgh — the foreign owners of the Algoma and Stelco mills, respectively — are stark. Small wonder then that news this week Essar is a likely bidder for the Stelco plants has caused such excitement in a mill that has endured little but bad news for the last eight years.

Both companies came to Canada in 2007 — Essar bought Algoma in April and U.S. Steel acquired Stelco in August. The prices of both deals were about the same — $1.9 billion in cash and assumed debt for Stelco and $1.8 billion in cash for Algoma in Sault Ste. Marie.

That's where the similarities end, however. Stelco was just out of a tortured two-year restructuring under creditor protection and was owned by three hedge funds anxious to take their profits and move on to the next deal. Algoma was a public company and while there had been financial trouble over the years, including two trips through court-supervised creditor protection, it was profitable and had a strong balance sheet when sold.

...

As exciting as an Essar takeover may seem for some, McMaster University business professor Marvin Ryder warns USSC's court-supervised creditor protection isn't about finding a solution that's good for Hamilton.

Its only goal is to get the maximum amount of money possible from the assets for stakeholders, including pensioners, creditors and shareholders.

"The judge's mandate in a case like this is crystal clear," Ryder said. "The judge is simply going to ask, 'Where can I get the best value?'

"The judge won't care about what's good for Hamilton, the pensioners or anyone else," he added. "The judge is only going to care about who is owed money and in what order."

Aside from that, Ryder wondered if Essar is really a big enough player to take over USSC.

Among other points, it's not in the top 25 largest steel companies in the world and continues to experience financial troubles — only last year it went through court-supervised financial restructuring that trimmed its gross debt by $240 million. That plan also required the parent company to put more than $400 million US into Algoma by infusing new cash equity and converting existing obligations into preferred equity.

In 2013, it got the provincial government to agree to a special pension funding plan that stretches top-up payments through to 2024 rather than over the usual five years.

Those financial troubles, Ryder said, raise important questions about the company's strength and its capacity to close a deal to buy the Stelco plants and to pour in the capital they'll need to get back into production.

"Essar just doesn't seem to generate enough cash on its own to do any of things it will have to do," he said. "From a business standpoint, they're just not a huge player compared to something like Mittal that has a lot more weight behind it."

...


Full story here

[RaginRonic]

http://www.thespec.com/news-story/59...esponsibility/

U.S. Steel plan: cut loose Canadian plants, financial responsibility


TORONTO — A plan laid out in an Ontario Superior Court hearing Wednesday calls for the former Stelco Inc. to return to its independent roots with United States Steel Corp. divesting itself of any control or liability.

U.S. Steel Canada lawyer Paul Steep told the court the transition agreement, if approved by the court, would see "the two companies go their separate ways" with U.S. Steel maintaining services and arrangements for up to two years.

But the key part of the deal is that the American steel maker would cut itself loose from future financial responsibilities of the Canadian operation.

The plan was explained in a hearing room packed with grim-faced retirees and United Steelworkers Union representatives that overflowed into the hallway.

The most contentious part of the plan involves freeing the company of pension obligations including benefit costs, as well as municipal taxes and other liabilities.

The fear of losing benefits is something that has sent ripples of fear through the U.S. Steel retiree community. Those trepidations were increased late last week when a report from the monitor overseeing the proceedings said "a near-term cessation of operations will be necessary" if the company isn't given relief from those and other costs.

Lawyers representing retirees and United Steelworkers members argued there had to be other ways to cut costs. But Steep said investors are not interested in supporting a company carrying liabilities from a previous ownership.

While the United Steelworkers representatives have steadfastly dug in over the pensioner benefits, they do like the idea of an independent steel company no longer controlled by U.S. Steel.


What's at stake:


The former Stelco is a shell of the industrial giant it once was. But U.S. Steel Canada — even as it balances on the edge of collapse — still casts an enormous shadow on Hamilton.

$3.9 billion In debt

$838 million Pension deficit

2,200 Workers

20,600 Retirees

$43.2 million In retiree medical health benefits

$5.8 million In municipal taxes

United Steelworkers 1005 President Gary Howe said, "I think a lot of people would be happy about the company becoming Canadian again."

Local 8782 President Bill Ferguson said, "I think it could make a go. The big problem now is steel orders being moved to the U.S. We could better keep the orders here with an independent company."

United Steelworkers lawyer Gord Capern argued the court-managed restructuring process would not have been necessary if U.S. Steel allowed its Canadian operation to complete its orders.

"The reason we are here is because of a crisis that U.S. Steel created," he said.

More than 150 U.S. Steel Canada pensioners came into Toronto on three rented school buses to "show the faces of the people who are affected by this," said Ferguson.

Retiree Chris Young, a Nanticoke steelworker for 30 years, was among them. He said he relies on the drug plan for $1,000 to $3,000 per year.

"They should not be allowed to get away with this. The pension benefits we have are really deferred wages that we gave up in collective bargaining years ago," he said.

The workers arrived for 10 a.m. expecting the hearings to start. But they were delayed until 3 p.m.

With that the assembled protesters walked down the street to Queen's Park, and 60 of them were allowed into the legislature to watch question period where the issue was being discussed.

"Both the provincial Liberal government and the federal Conservative government have allowed U.S. Steel to do what they please to its workers and pensioners," said Ontario NDP Leader Andrea Horwath. "There are tens of thousands of people in Hamilton who were promised a pension and benefits and spent their working lives contributing to those benefits. It is those pensioners, their dependents and the City of Hamilton who will now pay the price for those governments' failure to stand up for those hard working families."

Meanwhile, Hamilton Mayor Fred Eisenberger issued an open letter saying he "remains firmly behind the retirees and current workforce of US Steel Canada.

"We call on the federal and provincial governments to collectively commit now to ensuring that USS pensioners, employees and the City of Hamilton are protected during these trying times. "

The city would lose $6 million per year in taxes under the plan, and "compounded year after year would have a tremendously negative impact on the City's finances.

"But this issue goes far beyond tax revenues for the City; this speaks to the effect of a potentially higher and higher property tax bill on our workers, pensioners and senior citizens; who are our friends, family and neighbours."

Also, Wednesday's hearing heard that Haldimand County could be out millions of dollars in tax revenue as well because the company also wants tax relief from its Nanticoke operation.

"This would cause tremendous hardship in Haldimand. The municipality did not budget for that," said lawyer Peter Mahoney, who was representing the local government.

[RaginRonic]

http://www.thespec.com/news-story/59...-steel-canada/

Judge sides with U.S. Steel Canada

U.S. Steel Canada has been given the go ahead to cut off benefit payments to thousands of its pensioners while holding back millions of dollars in municipal taxes to the City of Hamilton.

The controversial decision by Justice Herman J. Wilton-Siegel late this afternoon came after a request from the company to sever its ties with parent company U.S. Steel and set out anew with decreased financial obligations.

Lawyers for the USSC have told the court the steelmaker could not continue on with $6 million to $8 million in losses per month.

The decision means benefits payments for prescription drugs, dental and vision care for 20,600 pensioners and family members will be cut off and the City of Hamilton will lose $6 million per year in taxes.

However, pension payments to retirees will continue, but the company has been spared from its responsibilities of annual payments into the plan for now.

The company has said pension benefits would have been $40 million before the end of this year and next year USSC would have to foot $100 million to fulfil its obligations under the plan.

United Steelworkers president Gary Howe said he was saddened to see retirees lose their benefits but wasn't surprised because the monitor of the restructuring recommended agreeing to the company's request.

He said many pensioners will be able to get drug coverage through the provincial Trillium Drug Plan. But people under the age of 65 years of age would not qualify.

The union, he said, is looking at ways to help hard-luck cases.

The decision is expected to allow the U.S. Steel to divest itself of U.S. Steel Canada paving the way for a new independent steel company in Canada.

http://www.cbc.ca/news/canada/hamilt...fits-1.3264966

A bankruptcy court judge has approved a transition plan that will sever U.S. Steel Canada from its U.S. parent and has allowed the company to suspend health-care benefits for tens of thousands of retirees.

In a brief decision on Friday, Justice Herman Wilton-Siegal endorsed a plan for U.S. Steel Canada to form its own company to manage its Canadian assets. He also endorsed its request to suspend health-care benefits to 20,000 pensioners, and to allow a reprieve on paying property taxes.

The details will be known on Tuesday. But Gary Howe, president of United Steelworkers (USW) Local 1005, said his union is disappointed. It will meet with drug benefit providers and look at other options to cover the gap for pensioners, particularly those under 65 not covered the province's Trillium drug plan.

In the meantime, he said, "the real story is that 20,600 people will be without benefits that they've earned."

But the decision has greater implications for U.S. Steel Canada (USSC), which runs plants in Hamilton and Nanticoke. The company has been in bankruptcy protection under the Companies Creditors Arrangement Act (CCAA) since last September.

What happens to a stand-alone U.S. Steel Canada, and whether it can continue to operate, is still very uncertain.

Other options included putting the company in "hot standby" mode in the hope that conditions change, or declaring it bankrupt, said Marvin Ryder, a McMaster University professor.

Both Ryder and steel industry analyst Chuck Bradford told CBC Hamilton on Friday that selling the Hamilton operation in its current state is unlikely. It's more likely that it will be sold in pieces. The Nanticoke, with its pricey rolling mill, is a better candidate for sale, Ryder said. It may even be sold to U.S. Steel once it's separated from the Canadian company, or the corporation will get it as part of a "debt swap." All of these details are unknown.

But "in terms of buying and operating (in Hamilton), I don't mean to be the bearer of bad news, but it's not likely," Ryder said.

Howe said the steelmaker is locked into paying pension contributions at least until the end of the year. But he's not sure what will happen after that.

There's also no time period specified yet for how long the company will go without paying health-care benefits or property taxes. U.S. Steel Canada pays about $6 million in property taxes per year in Hamilton. The company employs about 2,200 people.

Mayor Fred Eisenberger of Hamilton said once the city hears more details, it will decide whether to appeal the decision. City taxes for the rest of the year amount to about $1.5 million.

[king10]

Disgusting

[Jon Dalton]

Originally Posted by markbarbera

I like that. Steel is the new steel.

Steel is the new steel — what drives success at ArcelorMittal Dofasco
Hamilton Spectator
By Sean Donnelly

Over the past few weeks I've had many conversations about the steel industry in Canada, more than usual in fact. Most have been about the major challenges facing the industry and how ArcelorMittal Dofasco remains successful in these conditions.

These are good questions given there is excess steelmaking capacity in the world, to the tune of 700 million tons, with China having more than half of that. With its slowing economy China has significantly increased its dumped and subsidized exports to global markets, driving pricing down to unsustainable levels and threatening North American steel companies.

To address this unfair trade, ArcelorMittal Dofasco and its key stakeholders, as well as the Canadian government, are working to ensure that our trade rules and measures are effective, so that we operate in a competitive, undistorted market.

Despite this situation, I think there are four key elements within our control that help sustain and grow ArcelorMittal Dofasco, a made-in-Hamilton enterprise. They are all things within our control: leadership, continuous improvement, innovation, and people. In fact, I think these apply to any business, organization or community.

The region has a complex cluster of businesses of all sizes that form one of the biggest steel supply chains in the country — here, in Hamilton. As one of the biggest players, we have a responsibility to take a leadership role for manufacturing to ensure that our Canadian businesses can compete and win globally. To that end, most recently we announced the appointment of Dr. Greig Mordue as the new Chair in Advanced Manufacturing Policy at McMaster University (The Hamilton Spectator, October 2, 2015). We believe this investment is an important step to building evidence based policy for Canadian manufacturing to address issues attracting investment and unfair trade.

Leadership can also be quiet — it happens by virtue of taking care of business. Every Hamiltonian knows our community's foundation is manufacturing. Advanced manufacturing, the business of making things, is in our DNA. Don't mistake that for being a one-industry town. We've never been that, even when we were happy to call ourselves Steeltown. Our economy has always evolved and diversified, albeit at different speeds, with the constant of manufacturing in the private sector driving its growth.

Steel continues to be our largest private sector industry. ArcelorMittal Dofasco alone injects approximately $3 billion into the economy to make and sell our steel. That supports our direct employees and our partners that supply products, work on site and provide professional services, among others.

Last week I was at City Hall to accept a City of Hamilton Business Appreciation award. I did that on behalf of our more than 5,000 employees. During the presentation, Mayor Eisenberger provided an overview of our company in which he mentioned our history and size. He also described us as a "technology driven advanced manufacturing" company. That's true. We're focused on innovation in both our processes and our products. We know that small incremental improvements add up to significant change and potentially a step-change in the way we do things. That's why we've put our focus on continuous improvement across all aspects of our business, including with our suppliers and customers.

We believe that every organization must constantly and consistently improve everything it does. Nothing stays the same, nor should it. We are constantly evolving and changing to adapt to our customers' and the world's needs.

Steel is not just a material, it is the fabric of life. Look around you — you'll see steel everywhere. Our steel is pushing the boundaries of material science. Sustainable LEED certified buildings. Fuel-efficient cars and trucks that don't compromise safety. New product development used for 3D printed bridges and solar energy roof solutions. With 1,400 researchers worldwide and 150 here in Hamilton, we're investing in the future of our business and the world. It's clear, our steel is the new steel.

Like product innovation, there is also significant opportunity for process continuous improvement and innovation in our mills — how we run our business and how we make steel. This is our approach to becoming world class as these improvements make us more efficient and productive and improve our performance, including environmental impact.

Hamilton is home to many firsts including our recent achievement, the world's most automated basic oxygen steelmaking furnace (2013). With nearly 800 acres and nine different business units, there are plenty of opportunities for improvement that can then be shared throughout our Hamilton site and around the ArcelorMittal globe.

There's only one thing that brings all of these elements together and that's people. The world is what you make it, and our people aim to seize every opportunity to make it better. In our business Hamilton is held in very high regard and we're known for our leadership, our ability to continuously improve and innovate and for our very talented and skilful people. This is our secret sauce and why we remain proud to be a made-in-Hamilton company. Some things never change — Our product is steel. Our strength is people.

Sean Donnelly is president and CEO, ArcelorMittal Dofasco.

http://www.thespec.com/opinion-story...ittal-dofasco/

[RaginRonic]

www.thespec.com/news-story/6223828-u-s-steel-pushing-for-liquidation-option

U.S. Steel is using the L word again — liquidation.

The American former parent to U.S. Steel Canada says it opposes a new process to sell the Canadian icon, now independent and under creditor protection, unless it also considers the liquidation value of the company.

U.S. Steel Canada goes to court on Monday to seek approval of a new sales process that could see a new owner of the Hamilton and Nanticoke plants chosen by Oct. 31.

A first sales effort in 2015 failed to produce a bid it was willing to accept.

In a notice of objection to the new plan, the Pittsburgh-based former parent company says the slow pace of the restructuring is threatening the value of U.S. Steel Canada and it's time to look at what the Hamilton and Nanticoke assets may bring in a liquidation sale.

That valuation, the company said, could then be compared to any "going concern" bids that might be submitted.

"Given USSC's actual and estimated monthly operating losses and the depletion of USSC's working capital to fund these losses, the longer USSC takes to complete its new sales process, the greater the negative impact on USSC's value to creditors and potential bidders," the company argues. "Accordingly, it is important for any future sales process to take place as soon as reasonably possible. Failure to act quickly will not only decrease USSC's value to potential bidders as time goes on, but will also likely diminish creditor recoveries if USSC is ultimately liquidated."

U.S. Steel claims it is the largest of those creditors, with debts of $2.2 billion owed by the Hamilton icon. Whether those debts are valid or not will be decided in a six-day trial due to start Jan. 14 in Toronto.

U.S. Steel wanted to use its debts to finance the purchase of some of the Canadian assets, a move opposed by workers and the provincial government. They feared such a sale would produce little or no cash to top up the company's seriously underfunded pension plans.

"In the face of a failed sales process, the prudent way forward is to consider all of the alternatives for creating and realizing value and compare the outcomes of each," the American company said in its objection.

"The main alternatives for USSC are, in essence, selling the business as a going concern or selling the assets through liquidation. Accordingly, any future sales process should explore opportunities relating to both of these possibilities and USSC should solicit interest from potential bidders who are interested in continuing to operate the business as a going concern as well as potential bidders who are interested in acquiring the company's assets for other purposes."

U.S. Steel said it doesn't oppose the first stage of the new process — soliciting non-binding letters of interest from potential buyers or investors starting Feb. 1 with a deadline of Aug. 31. U.S. Steel, however, wants the second phase of the process potentially leading to a sale stalled until the liquidation value of the Canadian company is calculated.

U.S.S.C. has not yet filed a reply to the American company's objection. The new sales and investment solicitation process has the support of its chief restructuring officer and financial adviser who both say it is a realistic plan.

"In my opinion (the plan) represents a fair and commercially efficient process which allows a sufficient opportunity for USSC to optimize the chances of securing the best possible price for the assets for sale or the best possible investment in the continuing operations of USSC for the benefit of its stakeholders as a whole," financial adviser Homer Parkhill said in an affidavit.

In other issues to be submitted Monday to Justice Herman Wilton-Siegel, U.S.S.C. asks for an extension of its creditor protection to April 29, giving it time to start at least the first stage of the new sales process.

The current protection order expires Jan. 29. Such extensions are almost automatic in cases under the Companies Creditors Arrangements Act as long as the judge is satisfied there's a reasonable chance of restructuring a troubled company.

Approval will also be sought for changes to the letter engaging Bill Aziz as chief restructuring officer. Aziz is being paid $100,000 a month for his work and will be entitled to a "success fee" of $1 million if U.S. Steel Canada is sold or restructured.

In its motion asking for the small changes, U.S.S.C. said Aziz's experience is critical to its restructuring hopes.

"The terms of the Amended and Restated CRO Engagement Letter are fair and reasonable in the circumstances," the company said. "The CRO's experience in restructuring proceedings and knowledge of USSC's ongoing CCAA activities will continue to be beneficial to USSC and its stakeholders during these proceedings and in the proposed (sales process)."

The changes to the Aziz brief include removing the requirement to get approval from Pittsburgh for his actions and replacing the American company as the lender whose approval is required for some decisions.

The group representing active and retired salaried workers will also make a motion asking that former Stelco vice-presidents Bill Missen and Tim Huxley be appointed to their group.

[flar]

Liquidation has been their aim all along. The foreign competition isn't eliminated until the capacity to produce and process steel is completely dismantled.

[Dr Awesomesauce]

What US Steel won't dismantle, however, is that hulking mass of rusted metal down at the pier...

[RaginRonic]

http://www.thespec.com/news-story/62...e-made-public/

TORONTO -- Ontario's Court of Appeal has ruled the judge hearing the former Stelco's restructuring case has the power to order release of the "secret" deal that ended Canada's effort to get U.S. Steel to live up to its jobs and production promises.

In a decision released Tuesday morning the appeals panel ruled the Investment Canada Act does not bar disclosure of the agreement and sent the problem back to Superior Court Justice Herman Wilton-Siegel to decide if any other principle of law bars release of the deal.

The court-appointed monitor overseeing U.S. Steel Canada's restructuring was also ordered to give Wilton-Siegel a copy of the agreement for his own review.

The ruling is a significant victory for the coalition of active and retired workers and the city who have been agitating for almost five years to know the terms under which the Harper government agreed to drop its suit against U.S. Steel for breaking the production and employment promises it gave in exchange for government approval to buy Stelco in 2007.

Barely a year after completing that deal, however, the American company had idled all of the Canadian operations, citing a collapse in world demand for steel following the global financial meltdown.

The Harper government sued in 2009, seeking financial penalties to enforce the promises. In 2011, however, it suddenly dropped the suit in exchange for promises of capital investment in the Canadian plants and some small grants to community agencies.

Those were the only details of the settlement ever released. The full text of the agreement has been kept secret with the government saying U.S. Steel must agree to its release and the company refusing that permission.

As part of the former Stelco's creditor protection, the coalition asked for the deal's release saying they needed the information to evaluate restructuring proposals. Wilton-Siegel, however, ruled it constituted a type of "information" protected from release by the Investment Canada Act and there was nothing in restructuring legislation giving him the power to overrule that.

The appeal court decision arrived on the same day closing arguments began in the U.S. Steel claims trial -- the lengthy proceeding in which the same coalition of groups, joined by the provincial government and a former Stelco president, are trying to convince Wilton-Siegel that the American company's claim of $2.2 billion in debt from the Canadian firm is really equity.

If U.S. Steel wins its point it becomes U.S. Steel Canada's largest creditor with the power to shape a restructuring workers and the province fear will leave little to no cash to top up underfunded Canadian pension plans.

In his presentation, U.S. Steel lawyer Michael Barrack said it's clear from the way the Canadian-American financial arrangements are structured that they were conceived as debt that would have to be repaid.

He also bemoaned the way the Pittsburgh-based company is being attacked after doing a good deed in keeping its Canadian arm afloat during the 2008-9 downturn.

"But for the involvment of U.S. Steel a stand-alone Stelco would not have survived the recession of 2008-9," he said. "But, no good deed goes unpunished and those billions of dollars invested are now being characterized as pernicious."

Closing arguments continue Tuesday afternoon.

Good. U.S. Steel had no right keeping any secrets from the public at all.

[ScreamingViking]

Assuming things don't all go in their favour, what are the odds USS appeals everything... considering billions of dollars are at stake.

[SteelTown]

Judge sides with U.S. Steel over debt claims

http://www.thespec.com/news-story/63...r-debt-claims/

U.S. Steel has won a sweeping victory in its claim for $2.2 billion in debts from the former Stelco.

In a decision released Monday afternoon, Superior Court Justice Herman Wilton-Siegel confirmed nearly all of the company's claims as debts rather than equity. That makes the American parent company of U.S. Steel Canada the largest debtholder with extensive power to shape the Hamilton company's restructuring under creditor protection.

The claims addressed in the judge's decision total more than $2.2 billion Cdn.

Objectors to the parent company's claims, active and retired salaried and unionized workers and the provincial government, had argued the American company's claims were nothing more than an effort to recover the cost of buying Stelco in 2007.

Their objections were the subject of an eight-day trial in January.

[SteelTown]

Buyer wants to merge Stelco and Algoma into Canadian steel company

http://www.thespec.com/news-story/67...steel-company/

A bid to merge the former Stelco and Algoma into a new Canadian steel company took a major step forward Friday.

KPS Capital Partners, one of the leading bidders to buy U.S. Steel Canada, submitted a clear asset purchase agreement for Algoma in court in Sault Ste. Marie.

In an affidavit, Algoma's chief restructuring adviser said the KPS bid was the only offer submitted in the second stage of the bidding process.

The offer is conditional of negotiating a new collective agreement with the United Steel Workers and the "support" of the Ontario government.

[thistleclub]

Cover story in the October edition of the Globe and Mail’s Report on Business magazine:

Who Killed Stelco?
The steelmaker’s corrosion began decades ago. But it took the combined efforts of Bay Street, Ottawa and U.S. Steel to finish it off
(Report on Business, Bruce Livesay & Nicole Mercury, Sept 29 2016)

As the executives gave their spiel, Tony Clement’s blood began to boil.

It was a cold Ottawa morning in the winter of 2009, and Clement was sitting in a boardroom on the 11th floor of the C.D. Howe Building, a couple of blocks from Parliament Hill. As the Harper government’s newly minted minister of industry, Clement was listening to a couple of managers from U.S. Steel Corp. indicate that they had no intention of upholding their end of a deal with Ottawa, made only two years earlier, that allowed U.S. Steel to take over Stelco, Canada’s iconic steelmaker.

The visiting executives said that brutal conditions in their business gave them no choice but to renege on their commitments to maintain Stelco in robust health.

What ticked off Clement was their cockiness. “I felt they were belligerent. They were waltzing into the office and dictating terms and not looking for any kind of mutually acceptable halfway point,” he recalls. “So I didn’t like their attitude. I didn’t like the way they were treating Canadian workers. I didn’t like the way they were treating our agreement with them.”

So upset was Clement that he soon had his department sue U.S. Steel for walking away from its commitments.

That moment may have marked the lowest point in nearly 20 years of turbulence at Stelco, but it’s hard to say for sure—there have been so many low points. Another came five years later, when U.S. Steel put Stelco into creditor protection under the Companies’ Creditors Arrangement Act (CCAA). And another came a year later, in 2015, when U.S. Steel walked away from the company altogether, claiming to have lost $2.2 billion on its short-lived Canadian foray—and saying that it wanted its money back.

Today Stelco is a shadow of its former self. In its heyday, it was the largest steel manufacturer in Canada; it employed 26,000 people as of 1981. Stelco now has a head count of barely 2,200, and only a quarter of its Hamilton facility is operating. And once again, the company is up for sale. Or rather, what’s left of it is up for sale, with one offer on the table. As one former executive said of Stelco as of 2015, “There is no company there. It’s a shell.”

The demise of Stelco symbolizes the host of challenges that Canadian manufacturing has struggled with in the last 30 years. Globalization: check. Technological disruption: check. Legacy costs like underfunded pensions: check. Likewise with hollowing-out by foreign owners, wavering public policy, reliance on a cheap dollar, creative repurposing of bankruptcy law and, finally, the opportunistic attentions of distressed-debt investors—Stelco has been rocked by them all.

Many believe U.S. Steel took a sound company, albeit one in a challenged sector, and, when faced with adversity, switched tack and sought to destroy it. This is not just the view from the left. “The Steelworkers union is not exactly a right-wing organization, but they were bang-on,” says Clement, who is now running to succeed Stephen Harper as leader of the federal Conservative Party. “I agreed with them: They were getting shafted. Here I was, a Conservative minister, agreeing with one of the more radical union leaderships in North America…U.S. Steel was being, in my mind, a predatory organization.”

It’s not every day that a Tory and the Steelworkers can agree, but U.S. Steel’s sacking of Stelco makes for one of those times. Despite that consensus, the question remains: How did it come to this? How did a colossus of Canadian industry, the company that made Steeltown, get reduced to remnants?

It turns out there’s lots of blame to go around.



Read it in full here.