LTV CORP. Judge will rule Friday on plan to idle plants

As LTV tried again to shut down production, steel workers chanted, 'Let's make steel.'
By DON SHILLING
VINDICATOR BUSINESS EDITOR
YOUNGSTOWN -- A judge is forcing LTV Corp. to keep its steel mills and coke plants going until at least Friday even though it says it has no one to sell steel to and is losing more than $1 million a day.
An LTV lawyer asked Wednesday in federal bankruptcy court for authority to idle the plants as hearings continue on LTV's motion to sell its plants.
Judge William Bodoh said he will rule on the idling request Friday when he begins a third day of hearings on the sale of the plants. Not everyone involved could be in court today, so no action is scheduled.
The Cleveland-based steelmaker tried to idle the plants last week, but lawyers representing the United Steelworkers of America and other groups received an order from a federal judge in Cleveland that stopped the idling until Bodoh rules on the sale issue. LTV wants Judge Bodoh to lift that temporary order.
What's behind request: Mark Tomasch, an LTV spokesman, said LTV wants to idle the plants because it is losing between $1 million and $2 million a day.
Steel that is being produced is being stockpiled because LTV has no customers, he said. The company probably will be forced to sell the steel at discounted prices, he said.
LTV has angered the Steelworkers union, officials from several cities and government agencies and unsecured creditors with its plan to sell its plants. Lawyers representing these groups want the judge to stop or modify the sale.
Throughout the day Wednesday, a crowd of Steelworkers and their supporters on the sidewalk chanting "Let's make steel" could be heard from inside the courtroom.
LTV wants to place steel mills in Cleveland and Indiana on "hot idle" for 60 days, then auction the mills as ongoing concerns.
James Bonsall, a consultant for LTV who has been in charge of its restructuring plan, testified that it would be difficult to sell the mills as whole units and it was likely they would have to be sold piecemeal.
An auction recently for CSC Ltd., a steel mill in Warren, failed to produce a buyer for the whole facility, and equipment was sold piece by piece.
Lawyers opposing LTV's plan asked witnesses about the costs of extending that "hot idle" period to four months. "Hot idle" allows a plant to be kept at minimum operations so it can be restarted with much less cost than if it were "cold idled."
Threat of idling: LTV wants to "cold idle" its coke plants in Warren and Chicago. This would render the plants inoperable because of the damage the plants would suffer from the change in temperature.
"Cold idling" could begin as soon as Judge Bodoh approves LTV's plan. The Warren plant employs about 200.
Bonsall testified that LTV would like to sell the plants before idling them and officials think the threat of idling will make buyers act quickly instead of dragging out a sale process.
Those opposing LTV's plan suggested that it would be better to "hot idle" the coke plants to retain their value as a sale is pursued.
If last week's temporary order is lifted, the process of "cold idling" the coke plants would begin, Tomasch said. The idling would be gradual and would take several days to be implemented, he said.
A fifth LTV plant, a finishing mill in Illinois, would be "hot idled" for nine months as LTV tries to sell it.
LTV officials said they don't think they have to auction this plant because it has the most value.
Tubular products: Although LTV's plan calls for the continued operation of its Copperweld subsidiary and tubular products division, that plan is only temporary.
LTV intends to sell those units eventually, which would end the corporation's existence.
The tubular products division has a plant in Youngstown with about 80 people, although 15 are laid off, and an office in Youngstown with about 40 people.
Tomasch said marketing of the two units began a couple weeks ago but he couldn't predict when sales might occur.
Fred Gentile, president of United Steelworkers of America Local 1331, said LTV officials are confident the two units will be sold and not shut down because they are making money. The Youngstown plant makes pipe for oil and gas wells.
The union also is waiting to find out what happens with its labor contract. LTV has filed a motion to get out of the contract, which will be heard next week.
Gentile said LTV officials have said provisions will be made for plants that are continuing to operate but he has no idea what they will be.
shilling@vindy.com