Steelworkers union members at Ormet Corp. have ratified a new
labor contract with a suitor for the bankrupt aluminum
producer, a union official told AMM.
USW Local 5724, representing
about 800 workers at Hannibal, Ohio-based Ormet, voted
417-to-130 in favor of the new contract, according to John
Puskar, a staff representative for USW District 1.
The new contract keeps many
features of a previous contract, although there were two
technical changes and one change each to language in the
pension and Voluntary Employees Beneficiary Association plan
(VEBA), he said.
Like the previous deal, the new
contract runs until June 1, 2016, Puskar said. The agreement is
essentially with private equity firm Wayzata Investment
Partners LLC, Wayzata, Minn., he said. Smelter Acquisition LLC,
a Wayzata entity, is serving as the stalking-horse bidder in
Ormets bankruptcy proceedings (
amm.com, March 27).
"Until the May bid process
occurs, we think we have a deal with Wayzata," Puskar said.
"Moving forward, if its Wayzata, its a defined
contribution plan." But if another party were to outbid Wayzata
for the assets, language in the contract would require that
party come to the table to negotiate a new deal, he added.
An auction for Ormet is
scheduled to be conducted May 13, with a hearing on the
approval of any sale slated for May 15. If no qualifying bids
are received except that from Smelter Acquisition, no auction
will be held and the stalking horse can instead seek approval
to acquire the company.
Wayzata didnt respond to a
request for comment on the new contract.
Ormet filed for Chapter 11
bankruptcy protection in February, citing high legacy and power
costs and low aluminum prices (
amm.com, Feb. 26).