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Feds ready to assist steelmaker (1/02)

The federal government is ready to pitch in $50 million in loan guarantees to ailing Algoma Steel, provided unionized workers support a restructuring plan.

The federal government is ready to pitch in $50 million in loan guarantees to ailing Algoma Steel, provided unionized workers support a restructuring plan. Despite some protests from within the Liberal cabinet, the money would be earmarked to keep Algoma solvent once it emerges from protection under the Companies' Creditors Arrangement Act in late December.

The United Steelworkers of America had been negotiating with company management after noteholders agreed to a restructuring deal last month. The plan calls for $150-million cost cuts over the next three years, including reductions in wages, vacations, benefits and workforce reductions.

A ratification vote to support the plan among the Sault Ste. Marie steelmaker's 3,800 unionized employees was scheduled for the Dec. 22-23 weekend. The restructuring deal cannot go forward without union approval.