Union bosses representing the majority of the workforce at Algoma Steel Inc. aren’t saying much on record about the $1.7 billion merger agreement the company has entered into with special-purpose acquisition company Legato Merger Corp.
The merger agreement, which would see the Sault Ste. Marie steelmaker become a publicly traded company, was officially announced by Algoma Steel and Legato via conference call Tuesday.
USW Local 2251 president 'cautiously optimistic'
United Steelworkers Local 2251 President Mike Da Prat tells SooToday that he was informed of the merger by Algoma Steel Inc. Chief Executive Officer Mike McQuade the night before Tuesday’s announcement.
“The information given to me by the CEO was that our debt rating would be improved, a number of other issues would improve, certain amounts of debt would be made better,” said Da Prat. “So based on all that, what I can say, I am cautiously optimistic.”
The deal is expected to provide Algoma Steel Inc. with hundreds of millions of dollars to invest in electric arc furnace (EAF) steelmaking and to reduce its carbon footprint by approximately 70 per cent.
Da Prat says his union local - representing nearly 2,300 hourly rated employees - was informed in early May by Algoma Steel Inc. that a potential shift to EAF steelmaking is being considered.
“There’s been talk of that direction for years, but very, very very preliminarily - not that there was any intent to do anything about it. This time around, the company wants to talk to the union. We have some issues regarding format of those talks,” he said. “That’s about all I can say about that now.”
Rebecca McCracken, president of United Steelworkers Local 2724 - representing roughly 500 salaried Algoma Steelworkers in technical, support and front-line supervisor positions - tells SooToday that the union local isn't making any comments on the merger at this time.
Mayor hopes for steelmaker sustainability down the road
Sault Ste. Marie Mayor Christian Provenzano is hopeful the merger will benefit both the steelmaker and the community going forward.
“What we want to see is a steel provider that has a long-term and sustainable future, and we have no reason to believe this isn’t a positive development,” said Provenzano, speaking to SooToday Tuesday. “So we’ll see how it unfolds, and we’ll remain hopeful that it’s a sign of good things to come for Algoma.”
Provenzano says that from his perspective, it’s in the best interest of both the company and the community to ensure that the company is reinvesting in its technologies.
“With climate change and the effects of the pollutants that result from the blast furnace process, I think it’s a responsible thing to consider the implementation of an EAF, and I think there could be some real upside to the community - the health of the community - and the long-term sustainability of the company,” Provenzano said.
- with files from David Helwig