Troubled U.S. Steel Canada won’t sell to Essar Global
by Canadian Manufacturing.com Staff
The USW says U.S. Steel has rejected Essar Global as a bidder for its Ontario steel assets, even though it has been operating under creditor protection
HAMILTON, Ont.—The United Steelworkers (USW) has condemned U.S. Steel for its decision to eliminate Essar Global as a potential buyer of U.S. Steel Canada operations in Hamilton and Nanticoke, Ont.
The USW says U.S. Steel Canada (USSC) board of directors has rejected Essar Global as a bidder for USSC, which has been operating under Companies’ Creditor Arrangement Act (CCAA) protection since 2014.
“This is a potentially devastating decision for thousands of workers, pensioners and the communities that are most affected by the restructuring of our steel industry,” said Marty Warren, USW Ontario Director.
“We’re calling on the provincial government to intervene immediately and to use every means at its disposal to stand up for the best interests of our working families, pensioners and communities.” Warren said in a press release.
The decision follows a ruling last month by an Ontario Superior Court judge that disqualified Essar Global as a bidder in the sales process for Essar Steel Algoma, the Sault Ste. Marie steelmaker also operating under CCAA protection. Essar Global’s plans called for buying and operating the steel plants in Sault Ste. Marie, Hamilton and Nanticoke.
A U.S.-based hedge fund, KPS Capital Partners Inc., has been identified as the preferred bidder for Essar Steel Algoma’s operations in Sault Ste. Marie. KPS says its also wants to merge Essar Algoma and U.S. Steel Canada’s operations into a single company.
“We don’t need a hedge fund that intends to make huge profits at the expense of workers and pensioners. We have to ensure this restructuring benefits the long-term interests of workers, pensioners and our communities,” said Gary Howe, USW Local 1005 President in Hamilton.
“Liberal MPP Ted McMeekin has already stated publicly that the KPS plan ‘doesn’t sound like a very good deal at all’ and that he and his government agree with our position. So we expect the government to support us and oppose this decision,” Howe said.