Algoma Steel competitor Stelco Inc. has announced that it's struck an 18-month deal ensuring sales to its largest customer, General Motors.
However, the contract is conditional on Stelco reaching an agreement with the United Steelworkers of America, which announced yesterday that it opposes new financing arrangements with Deutsche Bank.
Background article The following announcement was made by Stelco:
********************* Stelco Inc. - Deutsche Bank commitment and General Motors
HAMILTON, ON, Nov. 16 - Stelco Inc. (TSX:STE) indicated today that it had reached agreement with General Motors with respect to a contract commencing April 1, 2005 and ending December 31, 2006.
While recent contracts with General Motors have typically been for one year, the new arrangement covers a longer period. Conditions to the agreement include written confirmation by November 18, 2004 that Stelco has entered into a memorandum of agreement with USWA Lake Erie Local 8782 for a new collective agreement which will be effective for the duration of the General Motors contract.
This condition is consistent with the previously announced deadline set by General Motors in October with respect to Stelco's labour situation.
In addition, the General Motors agreement is conditional on court approval by November 22, 2004 of the General Motors agreement as well as the two Deutsche Bank commitments previously announced by the Company.
Those Deutsche Bank commitments in turn require a satisfactory General Motors contract be in place. Stelco will be seeking approval of the Deutsche Bank commitment letters and the General Motors agreement on November 22, 2004.
Yesterday, Stelco filed court materials with the Ontario Superior Court of Justice for the hearing. **********************