U.S. Steel restructuring plans

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Florida-based Bedrock Industries is the company hand picked by the province to help restructure U.S. Steel Canada, which filed for creditor protection two years ago.

Bedrock Industries told CHCH that they aren’t releasing any details while their issue is still in court, but reports quoting a source close to negotiations say that Bedrock is ready to invest $500-million to keep U.S. Steel operational.

The deal includes pension and healthcare contributions, payments to the province along with U.S. Steel corporation in Pittsburgh. But Local 1005 President Gary Howe is waiting to see the official offer in writing.

“U.S. Steel might still want more and it’s difficult what the final pension arrangement might be and what the final health benefit might be.” said Howe.

A member of Finance Minister Charles Sousa’s office says the government feels comfortable with Bedrock handling the restructuring because of it’s history of owning similar businesses in Canada.

“Bedrock has also shown a commitment to working with all stakeholders, including organized labour, salaried workers, governments and affected communities to provide well-paying long-term jobs and benefits as well as pursuing continuous improvements in ongoing financial strain.”

But instead of a steel company, Bedrock may be more like a house flipper. Their website states that they “operate assets to maximize value creation and returns to our stakeholders.”

Both the local union and business analysts aren’t counting on Bedrock staying long-term if they are given ownership of U.S. Steel Canada.

“They’re a fund company, they’re looking to make money, right? They’re not a steel company.” said Howe.

“We may see demand go up. We may see prices go up, so that in five years, in seven years, a true steel making company might come along and say ‘we need more capacity, let’s buy that and add it to our family.” said Marvin Ryder from the DeGroote School of Business.

And that could be good news for current and former U.S. Steel employees.

“Traditionally, venture capitalists that take over a company that’s struggling. They don’t tend to ask for a lot of concessions from the union- in fact the contract normally gives the union whatever they want so they can focus their attention on other places.” said Ryder.

Like securing long-term contracts to keep the Hamilton and Nanticoke plants churning out product.

This may all sound like déjà vu for anyone who remembers Stelco’s restructuring in 2006 when three companies: Tricap Management, Sunrise Partners and Appalossa Management became new majority shareholders and eventually sold the company to…you guessed it, U.S.Steel.