Slater Set To Liquidate Operations

Slater Steel Inc. will ask an Ontario bankruptcy court for permission to liquidate its operations now that 11th-hour concession talks with one of the company's unions failed.

Slater's decision comes after a unit of the Confederation of National Trade Unions in Quebec walked away from talks with the insolvent company, according to the United Steelworkers of America, which represents about 400 workers at Slater's Hamilton, Ont., operation.

Quebec union leaders reportedly balked at wage concessions demanded by Slater management.

Liquidating Slater's operations -- a process expected to begin after a court hearing Friday -- will spell the end for about 800 employees in Quebec and Ontario, half from Atlas Stainless Steels, north of Montreal.

While Steelworker representatives spoke with management about running the Hamilton mill as a stand-alone operation, the company was not interested, according to Bill Baker, president of Local 4752, which represents the Hamilton workforce.

Baker added that the company's proposal called for straight wage concessions to the tune of $5.6-million annually in Hamilton, but no restructuring plan. The union responded with an offer of $2-million in cuts and a long-term turnaround plan, he said.

"They did not want to talk about restructuring the company," Baker said. "The wage concessions were something just to buy them time, I think."

Late last month, Slater said its debtor-in-possession financing -- which affords troubled companies money to keep operating while in creditor protection -- had been halved to $7.5-million.

Pounded by the combination of a stronger Canadian dollar, and higher scrap steel and energy prices, the Toronto-based company sought creditor protection in June. "Slater advised the union it will not re-enter negotiations because it believes it would not be sufficient to save the company," said Marie Kelly, the Steelworkers' assistant director for Ontario and the Atlantic region.

The maker of specialty and stainless steel is one of several Canadian steelmakers to suffer financial setbacks in the past year: Stelco Inc. has been walloped by heavy losses, Ivaco Inc. is in creditor protection, and Algoma Steel Inc. fell back into the red after emerging from a restructuring in 2002.

Last year, Slater announced the closing of several operations including the company's stainless bar mills in Fort Wayne, Ind., and Welland, Ont. It is unclear when the two mills in Ontario and Quebec will cease operating. Financial Post