Essar Global's Elimination from Industry Restructuring 'Potentially Devastating': Steelworkers

HAMILTON, ON, June 27, 2016 /CNW/ - The United Steelworkers (USW) is condemning a decision to eliminate Essar Global as a potential buyer of U.S. Steel Canada operations in Hamilton and Nanticoke.

"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.

"Essar Global has indicated it is more committed than other bidders to protect jobs, pensions and retiree benefits," Warren said.

"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."

The U.S. Steel Canada (USSC) board of directors has reportedly rejected Essar Global as a bidder for USSC, which has been operating under Companies' Creditor Arrangement Act (CCAA) protection since 2014.

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.

However, it appears KPS is not prepared to protect jobs, pensions and retiree benefits, USW leaders say.

"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.

"Essar Global has put forward a plan that is more aligned with the real needs of our members and our communities – jobs, pensions and retiree benefits," said Bill Ferguson, President of USW Local 8782 in Nanticoke.

"As a key stakeholder in this process, it's critical for the province to join us in fighting to reverse the decision to eliminate Essar Global from the bidding process. Our government has to step up and challenge this betrayal of thousands of families," Ferguson said.

SOURCE United Steelworkers (USW)

Marty Warren, USW Ontario Director, 416-243-8792; Gary Howe, President, USW Local 1005, 905-531-4078, [email protected]; Bill Ferguson, President, USW Local 8782, 905-537-8782, [email protected]; Bob Gallagher, USW Communications, 416-544-5966, 416-434 2221, [email protected]