USW Criticizes Decision to Confirm Grupo Mexico Plan of Reorganization as a Blow to ASARCO Workers, Retirees and Communities

Contact: Manuel Armenta (USW) – (505) 878-9756

Albuquerque - On Friday, November 13, the United States District Court in Brownsville, Texas issued an order in the ASARCO LLC Chapter 11 bankruptcy confirming a plan of reorganization proposed by Asarco, Inc., an entity controlled by Mexico City-based conglomerate Grupo Mexico.

“The USW is certainly disappointed with the District Court’s decision. We are reviewing the 135-page decision, as well as our legal and other options,” said Robert LaVenture, Director of USW District 12 and union chairman of bargaining with ASARCO. “It appears that the District Court committed the same error as the Bankruptcy Court by disregarding contractual provisions that protect employee rights and benefits in the event of a sale or other change in control.”

The United Steelworkers (USW) represents approximately 1,300 ASARCO workers at mines and smelters in Arizona and a facility in Amarillo, Texas. The USW supports a competing plan of reorganization submitted by ASARCO and financed by Sterlite USA, an affiliate of an India-based company. The USW and Sterlite have already bargained a new labor agreement in connection with Sterlite’s reorganization plan.

Grupo Mexico and the USW engaged in bargaining earlier this year in an effort to reach a new agreement, but the parties have not met since July 24, when the USW submitted a comprehensive proposal.

“Our July 24th proposal provides for a long-term agreement that protects American jobs and keeps profits earned by American workers in the company,” said LaVenture. “Grupo Mexico never offered a counter to our July 24 proposal and instead, mainly chose to communicate its bargaining position through court filings and the statements of its bankruptcy lawyers.”

Grupo Mexico acquired ASARCO in 1999 and controlled the company through its bankruptcy filing in August 2005. Throughout most of the case, however, ASARCO has been led by independent directors.

“ASARCO has thrived outside of Grupo Mexico’s control, and all stakeholders – workers and retirees, small businesses that supply goods and services to the mines and smelters, local governments that depend on ASARCO tax revenues and federal and state governments that expect ASARCO to be a good steward of its environmental obligations – should be concerned about the possibility of Grupo Mexico regaining control of this business,” said LaVenture.

Speaking directly to ASARCO’s workers, LaVenture said, “The Steelworkers and other union workers who work at ASARCO deserve all of the credit for the company’s success in the past four years. Should Grupo Mexico follow through and regain control of ASARCO, we will need to stand together in solidarity once again to preserve the benefits we have negotiated.”

The USW represents approximately 850,000 workers in the United States and Canada and is the largest union representing workers in the copper industry.

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