The Ontario Superior Court has approved a United States Steel Corp. plan to cut loose its Canadian unit, effectively ending an eight-year odyssey that included losses that ran into the billions of dollars, battles with governments, and acrimonious disputes between the Pittsburgh-based giant and its unionized Canadian employees.
U.S. Steel will provide some transition assistance to U.S. Steel Canada Inc. under a plan approved by Justice Herman Wilton-Siegel late Friday. The Canadian unit will become independent, but is likely to be put up for sale.
U.S. Steel Canada has been operating under the protection of the Companies' Creditors Arrangement Act since September, 2014. An effort to sell the company earlier this year failed.
So did mediation, which was unsuccessful at brokering a deal between U.S. Steel, the United Steelworkers union, active salaried employees and retirees, the province of Ontario and the city of Hamilton.
The Canadian unit has debtor-in-possession financing of $75-million to carry on operations, but it faces a revenue hit in the fourth quarter because U.S. Steel has shifted production of high-value automotive contracts to its mills in the United States.
U.S. Steel will make pension payments for the Canadian unit through the end of the year, but health care benefits to about 20,000 retirees and dependents have been suspended.
Justice Wilton-Siegel said he will issue reasons for his decision next week.