The next chapter in the Stelco saga began on the eve of Canada Day with the takeover of the Hamilton and Nanticoke operation by the US holding company, Bedrock Industries. Essentially Bedrock picked up the steelmaking assets for ten cents on the dollar. US Steel had paid $1.2 Billion for the operation a decade ago. The Bedrock deal is valued at $127 Million (US dollars). In addition the new owner will contribute up to $430 Million to the workers’ pension fund, over the next 20 years depending on the financial performance of the company. The deal also marks the steelmaker’s emergence from nearly three years of bankruptcy protection.
With the low acquisition cost, Bedrock is in a position to invest in the Canadian operation, and has announced plans to spend over $200 million on capital improvements. Additionally, the company is already eyeing Algoma Steel in Sault Ste. Marie, which is still under bankruptcy protection. Beleaguered Stelco employees are casting a wary eye on the deal, hoping for the best but nonetheless skeptical after a string of broken promises by US Steel, who essentially stripped Stelco of some of its best customers and transferred the work to the US operation. Already some are resorting to black humour, calling Bedrock “Fred and Barney,” a reference to the Flintstone cartoon.
Bedrock CEO Alan Kestenbaum has acknowledged that the biggest challenge going forward will be to build trust between the unionized workforce and management. He took a personal role in recent contract talks with the two Canadian Steelworkers locals. For his part, Canadian born United Steelworkers President Leo Girard says he believes Kestenbaum is sincere in wanting to turn Stelco back into a going concern.
The company will lease the land it currently occupies, while the remainder of the complex will be eventually sold for development.
Down the road, Arcelor Mittal Dofasco continues to enjoy some of the best financial results in company history; and despite all the turmoil, business is actually brisk at Stelco’s Hamilton operation where workers who have seen it all, continue to finish steel for customers.