Workers at two Stelco Inc. mills will vote Friday and Tuesday on new labour agreements with the steel maker, the last big hurdle left for the company to jump before it emerges from creditor protection.
The company could exit from protection under the Companies' Creditors Arrangement Act at the end of June, ending a saga that began when its then-parent, United States Steel Corp., put it into CCAA protection in September, 2014.
Creditors have already approved a deal by Bedrock Industries Group LLC, a U.S.-based restructuring company, to take over what was U.S. Steel Canada Inc. before it changed its name back to Stelco. The Ontario Superior Court has scheduled a hearing for next week where it will make a final ruling on the restructuring plan.
Stelco has already reached agreements with such stake holders as the Ontario government and the company's non-union employees and retirees.
U.S. Steel bought Stelco in 2007 after its first trip through the CCAA process.
Its controversial reign over the company included several lockouts of employees at mills in Hamilton, Ont., and Nanticoke, Ont., and a court battle with the federal government over promises the Pittsburgh-based giant made when it was permitted to take over Stelco.
The government sued U.S. Steel under the Canada Investment Act, saying its shutdown of Canadian operations during the 2008-2009 recession violated the terms of the takeover agreement. The government of then-Prime Minister Stephen Harper settled the case in a secret deal whose terms have never been released.
Bill Ferguson, president of United Steelworkers local 8782, which represents workers at the Nanticoke operations, said he's optimistic that Bedrock's ownership of the company will be an improvement.
"You can't get much worse than U.S. Steel," Mr. Ferguson said. "We've seen the bottom and we're coming back up again."
One of the key parts of the agreement for 540 unionized workers and 9,000 retirees in Hamilton is a provision that requires Bedrock to contribute $200-million over 10 years to a health care trust that will restore benefits stripped from retirees during the CCAA process.
Stelco no longer makes steel in Hamilton, but it operates processing mills and coke ovens.
Gary Howe, president of USW local 1005 in Hamilton, said the union was faced with difficult decisions in the negotiations. The liquidation of the company was one risk if Bedrock did not win some concessions.
"If they liquidated Hamilton, even if somebody came in and picked up the cold mill and ran it, the $200-million we got for [benefits] would be at risk," Mr. Howe said.
The tentative agreements are for five-year contracts that retain a defined benefit pension plan for employees hired before Oct. 15, 2011 in Hamilton. At Nanticoke, the deal restores weeks of vacation eliminated during one of the lockouts and a cost of living adjustment.
Wages range from $23 an hour to $33.90 in Hamilton. In Nanticoke, where there about 1,000 workers and a mill that produces steel, workers start at $22 an hour while those with the highest seniority earn about $35.
Voting will take place Friday in Nanticoke and Tuesday in Hamilton.
Bedrock will contribute $30-million up front to the pension funds in Hamilton, $10-million a year during its first five years of ownership and $15-million a year in the 15 years after that.
Bedrock had previously agreed to pay U.S. Steel $120-million for a secured claim the parent company held against its Canadian unit and $61-million (U.S.) to the Ontario government to cover potential environmental liabilities.