WASHINGTON, DC - There are two competing business plans to bring copper company ASARCO out of bankruptcy, but only one of them serves the interests of the company's many employees and their families.
The decision is now in the hands of the U.S. Justice Department and the Attorneys General from 22 states, the company's largest creditors due to large environmental liabilities.
The new company that controls ASARCO will retain responsibility for significant liabilities. And as creditors, the Attorneys General have a critical stake in assuring that the reorganized ASARCO will make good on its commitments.
We urge those decision makers to support the bid by Vedanta Resources PLC to assure a future for the workers and their families at ASARCO and to reject the competing inferior offer by the other bidder, Grupo Mexico.
The 1,500 copper miners of the United Steelworkers (USW) employed at ASARCO mines and smelters in Arizona and Texas know first hand what it's like to work for Grupo Mexico, a Mexico City-based conglomerate that owns industrial operations throughout the Western Hemisphere.
When ASARCO was controlled by Grupo Mexico from 1999 to 2005, labor relations were marked by constant strife. The company unilaterally cut health care benefits for hundreds of retirees and halted disability benefits for other employees.
Grupo Mexico has stripped ASARCO of its most valuable assets. ASARCO was then starved of essential equipment for its U.S. operations.
Despite rising copper prices, Grupo Mexico demanded harsh cuts to wages and benefits in 2004 contract negotiations. The copper miners had no choice but to strike in July 2005. Shortly after the strike began, Grupo Mexico caused ASARCO to file for Chapter 11 bankruptcy protection. Only after the court removed Grupo Mexico from control, did USW members then return to work with a new agreement.
As a matter of public policy, Grupo Mexico's behavior while it was in control of ASARCO should not be rewarded. Just one week after Grupo Mexico put ASARCO in bankruptcy, the Government Accountability Office (GAO) issued a report saying some companies transfer their most lucrative assets to parent corporations or subsidiaries to limit their exposure in bankruptcy proceedings - exactly the strategy that Grupo is currently being accused of pursing.
There are vast differences between Vedanta and Grupo Mexico. In light of our careful investigation of both companies' records in the United States and abroad, the AFL-CIO and the unions at ASARCO -- the USW, Boilermakers, IBT, IBEW, IAM, IUOE, Millwrights, and Pipefitters -- all believe the choice is clear. Every factor, including the environmental and worker rights records, show Vedanta is the superior choice.
We urge the Justice Department and state Attorneys General to make their choice Vedanta Resources PLC in order to assure a future for the workers and their families at ASARCO.
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