Friday, April 25, 2025

New developments in the bid to keep U.S. Steel Canada operating in Hamilton and Nanticoke. A judge has approved a financial plan to keep the business afloat while it’s under creditor protection until the end of next year.

The court has approved a $185 million emergency loan from U.S. Steel Canada’s American parent. It’s know as debtor in possession financing or DIP financing and the purpose of this emergency loan is to keep U.S. Steel Canada’s facilities running while the company restructures.

The government of Ontario, the city of Hamilton and the steelworkers union all have objections to the loan and lawyers have been negotiating behind closed doors for the past few days to try to reach some sort of deal.

Today, a lawyer for the city said they were satisfied over concerns the city had over taxes. Meanwhile, lawyers for the steelworkers and local 1005 did not object in the end to this DIP. They also did not consent to it.

Outside the court we got reaction to this news.

Local 8782 President Bill Ferguson said there are still terms in this draft that they are not pleased with like the OPED, which stands for Other Post Employment Benefits.

Bill Ferguson: “There were pieces of it that talked about OPED but whether or not OPED payments would carry on unless there was a satisfactory outcome in U.S. Steel’s view. Now, DIP blending does have a lot of caveats to it. However, we think that having that sort of DIP arrangement is counterproductive. However, we’re trying to go forward and find some sort of solution to this. There is value in the place. We have a mandate to make sure the pensioners and the actives are taken care of. There is a requirement right now for the money to keep the plant running. We want to make sure that our pensioners and actives are protected. And we’re prepared to go ahead and try and find a reasonable solution to this restructuring.”

Rolf Gerstenberger, Local 1005: “At the end, all the concerns that we had that we put in our affidavit about the default sections — there a whole section of the DIP agreement that allows the company to default if some things aren’t met — everyone of those conditions is there to make sure that U.S. Steel make the process go the way they want. So if something goes against them in the process, they can trigger a default. So that is one of the main concerns we had here. In the end we couldn’t consent to it because there were these serious things involved.”

Hamilton Mayor Bob Bratina: “We should be happy that the process will continue which means that the company will function. If it didn’t go through and there was no alternative financing then a shutdown would be terrible for everyone. So, it’s a matter of buying time. The union’s position is that they consented but they didn’t approve. And so at least there still will be production at the Hamilton and Lake Erie facilities in the year ahead.”

This evening the President and General Manager of U.S. Steel issued a statement which reads in part:

“The extension, together with the DIP Financing announced today, enhances the prospects for U. S. Steel Canada and its stakeholders to come together to develop a viable plan of arrangement for the business,” said Michael McQuade, President and General Manager of U. S. Steel Canada. “In the meantime, we will continue to manufacture and deliver the high-quality steel products U. S. Steel Canada is known to produce.”

And that stay extension will now protect U.S. Steel Canada from its creditors until January 23rd.