A decade ago, Stelco survived on a promise that it would make up its gigantic pension shortfall over 10 years.
But the new deal proposed for the survival of Stelco removes the obligation to make up that shortfall.
The new deal proposes that the company will be allowed to make payments into the fund from a variety of sources — all presuming the company continues to operate.
‘The commitment we get into our pension plan is extremely lean.’
– Gary Howe, 1005 president
So that leaves a dilemma for the local union chapters, trying to negotiate their part of the deal with the potential buyer.
Do they go along with Bedrock, possibly the company’s best chance at staying alive and continuing to make steel (and thus hopefully contributing to the pension fund all the while)? This includes putting some faith that the land not being used for steelmaking can be sold and developed in exchange for more money in the fund.
Or do they hold out for another offer or better terms where a buyer might agree to aim its contributions at that larger shortfall? What if it stops operating, or sells Stelco off?
Despite hundreds of millions of dollars put into the pension funds over the last decade, the shortfall remains and still hovers around $1 billion. The company’s former owner, U.S. Steel, is long gone, and Stelco has again been in court-supervised bankruptcy protection since 2014 while it works out a way to move forward.
“How is this exactly going to work? Is there a responsible approach to the pension?”
– Bill Ferguson, president of Local 8782
Now another company, Bedrock, is kicking Stelco’s tires. Stelco will seek official court approval Thursday to move forward with a sale to Bedrock, some terms of which were announced last Friday.