CHICAGO United 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).