Everyone needs to work together for U.S. Steel Canada to survive: judge

The judge whose decisions have created a newly independent U.S. Steel Canada is urging the company, the union and other key stakeholders to work together for the company's survival. 

The parties would be well advised.... to focus on the future.- Superior Court judge Herman Wilton-Siegel

In his written reasons for agreeing to a plan that would sever ties between U.S. Steel Canada and its American parent released Wednesday, Superior Court judge Herman Wilton-Siegel says it's time to "close the book" on any relationship between U.S. Steel Canada (USSC) and U.S. Steel. And if the former is going to survive, he said, then everyone needs to put historic grievances aside and work together.

"The reality facing the stakeholders is that, going forward … consultation and co-operation among the remaining principal stakeholders will be crucial for the survival of USSC," he wrote. "The parties would be well advised.... to focus on the future of the newly independent USSC."

Appropriate and necessary

The 38-page document is a longer version of the judge's Friday decision, which agrees to a plan to separate the two companies, halt the attempted bankruptcy protection sale of assets and leave U.S Steel Canada as a separate company that will sink or swim on its own. The decision allows USSC to suspend health-care benefits to some 20,600 pensioners, as well as paying its property taxes. 

If the business plan doesn't happen, he said, USSC will face "insurmountable" losses.

"I conclude that it is not only appropriate, but necessary, to authorize the business preservation plan, including the cash conservation measures contemplated therein," he wrote.

He also said that another option USSC studied — putting operations on standby in a "hibernation scenario" — would "accelerate the termination of retirement benefits."

The company has been involved in a 13-month bankruptcy protection process initiated in September of 2014. But the new company will limp forward into 2016 without $200 million worth of orders for steel that the U.S parent shifted to U.S plants earlier this month. Acceptance of that shift of production was among the measures Wilton-Siegal approved during the court process.

Unions meeting on future plans

Bill Ferguson, president of United Steelworkers (USW) Local 8782 in Nanticoke says the union is meeting with its lawyers Thursday to discuss the decision.

Wilton-Siegel's approved transition plan leaves USSC open, at some point in the future, to selling all or part of the Hamilton and Nanticoke plants.

USW locals in the two areas say they're interested in forming a new company to operate the plants, and calling it Stelco.

Stelco is the name of the company that owned the facilities before U.S. Steel Corp. purchased them in 2007.

As for the retirement benefits, Wilton-Siegel cited a case of Cliffs Natural Resources Inc.'s Bloom Lake and Wabush mines, where workers also lost their benefits. 

Meanwhile, Hamilton city council voted Wednesday night to ask the provincial and federal governments to take ultimate responsibility for U.S. Steel pensions.

The motion, moved by Coun. Sam Merulla of Ward 4, calls on the upper levels of government to "assume responsibility for U.S. Steel's pension plans and that this include a provision and assistance with health benefits as well."

Merulla and other councillors called the court ruling "unconscionable" on Wednesday.

"What's happening today is so unprecedented in so many ways that it's positively criminal," he said. 

"It speaks volumes to a system that's broken and needs to be fixed."

Coun. Matthew Green of Ward 3 says it adds insult to injury that U.S. Steel Corp. is one of the major creditors of USSC, which means it's near the top of the list to be paid back.

On Monday, Conservative James Moore, who has served as industry minister, says the federal government has sued U.S. Steel before and could again. The province has also pledged $3 million to establish a "transitional fund."