Judge ok's U.S. Steel's restart of coke ovens, 77 workers to return
Kelly Bennett | CBC News | Posted: December 5, 2014 5:23 PM | Last Updated: December 5, 2014
77 laid-off workers will get called back, according to the motions filed in court late Thursday
A judge granted permission Friday morning for U.S. Steel Canada to restart its Hamilton coke ovens, which have been "hot idling" since October under the company's restructuring process. That means 77 laid-off workers will get called back, according to the motions filed in court late Thursday.
The company called for an emergency hearing to consider the deal, under which the Hamilton plant will convert coal to coke to sell to the U.S. parent company. The hearing was called at the last minute because of the time-sensitive nature of ordering and shipping the raw coal necessary to be made into coke before the St. Lawrence seaway freezes and is closed to shipping.
"They have to get enough coal on the ground to run the coke ovens over the winter," said Rolf Gerstenberger, United Steelworkers Local 1005 President. "You don't want to start the coke ovens up and have to shut them down because the seaway's frozen."
U.S. Steel Canada has two plants — Lake Erie Works and Hamilton Works. When Lake Erie is fully operating, it has enough capacity to produce 65 percent of the coke it needs to make steel. Usually Hamilton supplies the rest. Once U.S. Steel had enough coke to last the Lake Erie plant until April, it shut down ("hot idled") the Hamilton plant's coke ovens in late October. That means they kept the coke ovens fuelled while the company and courts explored options that could include the sale of the coke ovens.
In the restructuring process, the courts and U.S. Steel Canada approached a "third party industry participant" to see if they could strike a deal to buy the coke produced in Hamilton's plant that doesn't go to Lake Erie.
In the documents filed Thursday, U.S. Steel Canada outlined the deal's benefits.
"It would generate net positive incremental cash flow for USSC, eliminate USSC's hot idle costs of the Hamilton Works coke ovens, and generate by-products that are beneficial to the operation," the court documents state.
"The arrangement may also enhance the prospects of a future sale of the coke ovens as an operating fully staffed asset," the documents continue.
Gerstenberger said he didn't understand why such a deal couldn't have been found without shutting down the coke ovens in October.
"Now they've got a buyer so now they can make money," he said. "Why did they shut it down and why did we have to go through this process?"
Trevor Harris, director of government and corporate affairs for U.S. Steel Canada, said the biggest factor in the deal going ahead was the union's agreement to a stand-pat contract for 30 months, which they voted for overwhelmingly in October.
The deal with workers provides more continuity, which is more attractive to potential customers. Harris wouldn't say the deal would've been impossible without the spectre of bankruptcy -- "just less likely."
"It wasn't a pressure play; it was just the reality of the situation," Harris said.