U. S. Steel Canada is going to court in Toronto Friday morning for permission to restart its Hamilton coke oven battery.
In documents filed late Thursday afternoon the company asked for an emergency hearing to approve a deal that would see the Hamilton plant sell coke to its American parent company.
Hamilton's coke-making operations were idled at the end of October after the company filed for creditor protection. Since that time, the company said in its motion to be heard in Toronto Friday, its has been looking for someone to restart the plant next year with an arrangement that would allow some of the coke to be used by the Lake Erie Works and the rest to be sold to a third party.
In its motion the company said restarting the battery would bring 77 laid off workers back into the plant and would "materially improve USSC's cash flow, and is expected to enhanced any sales process."
The company's filing said the motion was being brought to court on an emergency basis because the deal must be struck because of a looming deadline for orders for the coal the Hamilton plant will need to make coke, coal that must be delivered before the Great Lakes freeze for the winter. Specifically, the company wants to divert an order of coal. The redirection, the company said, must happen Friday "or it will be too late. Delaying approval of the deal until spring, the company said, "will have a detrimental economic impact on USSC and will delay the anticipate recall of employees on temporary layoff."
In a related development Friday, Hamilton NDP MP David Christopherson presented a motion in Parliament calling on the Harper government to apologize to Canada for allowing U. S. Steel to takeover Stelco in 2007. His motion also seeks changes bankruptcy legislation to protect pensioners and to make public the deal under which the government dropped its lawsuit against the company for breaking employment and production commitments.
"We want 100 per cent protection for the pensioners," Christopherson said in an interview. "Under current legislation, pensioners come at the end of the line when assets are divided up in a bankruptcy and we want that changed."
Such demands have been made for years, he admitted, but legislation to change bankruptcy law has always been defeated.
In September, U. S. Steel Canada won court-supervised protection from creditors, citing years of losses and the high cost of fully funding its pension plans.
It is now adding up how much is in its pension plans, what they owe over time and the difference between those figures.
If the company were to go out of business with its pension plans underfunded, more than 14,000 retirees would see their incomes cut by enough to eliminate the shortfall. A provincial guarantee fund would make up some of the cuts.
One of the promises that convinced the Harper government to permit the sale was U. S. Steel's commitment to employ an average of 3,105 workers and produce 14 million tons of steel for three years.
Based on that, the federal government concluded the takeover would provide a "net benefit" to Canada and approved the deal.
Within a year, however, the company slashed the Canadian workforce and started closing facilities, citing the collapse in world demand for steel that followed the start of the 2008 recession. Those closures included the end of steelmaking in Hamilton and reduction of the company's workforce to about 2,000 today.
The government sued over those broken promises in 2009, but after winning all the preliminary motions, Ottawa suddenly dropped the suit in 2011 in exchange for promises of more investment from the company and small community grants.
The full text of that agreement has never been made public.
"This hasn't been a net benefit for the people of Hamilton or Canada and the federal government should apologize for allowing this terrible deal," Christopherson said.
In an email exchange, company spokesperson Trevor Harris said: "U. S. Steel Canada remains mindful of its obligations under the Investment Canada Act.
"As U. S. Steel Canada proceeds with the CCAA process, the company will continue to work with the court-appointed monitor and the chief restructuring officer to develop a restructuring solution in consultation with stakeholders — including employees and pensioners."
Source: http://www.thespec.com/