LTV CORP. Deal to keep plants going heads to court

Domestic steel plants should be more attractive to investors by February.
By AMANDA DAVIS
and DON SHILLING
VINDICATOR STAFF WRITERS
YOUNGSTOWN -- LTV Corp. has agreed to keep its steel mills and a Warren coke plant running for longer than originally planned in hopes of attracting buyers.
These extensions would help the plants survive as ongoing businesses instead of being closed or sold piecemeal, said Bill Prejsnar, a union official at the coke plant.
The Cleveland-based steelmaker and groups opposing its plan to sell its plants reached a tentative agreement Thursday. A hearing on the deal was to take place today in federal bankruptcy court. The deal would place coke plants in Warren and Chicago on low production for at least three weeks and extend the idling of steel mills until Feb. 28.
Much of the agreement is focused on improving the chances of a sale, but the United Steelworkers of America hasn't given up hope that LTV Steel and its 7,500 jobs can be saved.
The deal calls for LTV to report to the court Dec. 19 on efforts to obtain operating financing. It also allows the union to appoint a consultant to aid in obtaining a $250 million federal loan guarantee for LTV and requires the company to cooperate in those efforts.
LTV, which says it is nearly out of money and has no customers, has agreed to delay an attempt to cancel the union contract until Dec. 19.
What was sought: LTV previously asked Judge William Bodoh to approve an immediate shutdown of the Warren coke plant, which employs about 200. Closing down a coke plant without keeping it heated renders it inoperable.
"That would have been a disaster," said Prejsnar, unit chairman for Steelworkers Local 1375.
Prejsnar said the extension would give companies an opportunity to buy the plant.
Interested bidders have toured the plant, but none of them could move as quickly as LTV was demanding, he said.
The deal calls for the coke plants to go to a slow-coking cycle, which involves maintaining just enough production to keep the furnaces warm.
'Hot idle': LTV's steel mills would receive extra time as well. Although they will not be producing steel, an extension of the time they are placed on "hot idle" makes it more likely they will be sold, the Steelworkers said.
The deal says mills in Cleveland and Indiana would be placed on "hot idle" until Feb. 28, instead of for 60 days as LTV had requested. Keeping these mills warm allows a buyer to ramp up production at less cost than if there were a cold shutdown.
The "hot idle" can be extended until March 15 if a firm buyer is certified and President Bush hasn't enact penalties on imported steel.
LTV's opponents are hinging their hopes for a sale on a recommendation for tariffs or quotas on certain types of imported steel that was expected from the International Trade Commission today. President Bush is expected to implement the penalties in February.
A consultant for unsecured creditors testified Wednesday that such a ruling should increase the price of steel by about 40 percent, which would make the LTV mills more attractive to investors.
Mills will be sold piecemeal if they can't be sold as an operating business.
LTV's original plan called for "hot idling" a finishing mill in Illinois for nine months.
Mark Tomasch, an LTV spokesman, could not be reached to comment.