LTV CORP. Deal to keep plants idling goes to court

Domestic steel plants should be more attractive to investors by February.
By DON SHILLING
VINDICATOR BUSINESS EDITOR
YOUNGSTOWN -- LTV Corp. will idle its steel mills and coke plants for longer than originally planned in hopes of attracting buyers.
These extensions should 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 extensions are part of a deal that Judge William Bodoh of federal bankruptcy court approved this morning.
The deal gives LTV what it sought most -- the end of production at steel mills in Cleveland and Indiana -- in return for placing the mills on "hot idle" status for longer than planned and not immediately shutting down coke plants in Warren and Chicago.
The steel mills will idle until at least Feb. 28, instead of just 60 days, and the coke plants will operate at low levels for three weeks.
The Cleveland-based steelmaker and its lenders settled out of court Thursday with its union and creditors after lawyers had battled through two days of court hearings.
Much of the agreement attempts to make LTV plants more attractive to potential buyers, 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 wants to shut down because it's nearly out of money and has no customers. It has agreed to delay an attempt to cancel the union contract until Dec. 19.
Prejsnar said the extension for the coke plants is good news because it will help companies who are interested in buying the Warren plant, which employs 200. Once a coke plant is shut down, it becomes inoperable because of the damage that occurs.
Interested bidders have toured the plant, but none of them could move as quickly as LTV was demanding, he said.
Coke plants will go to a slow-coking cycle, which involves maintaining just enough production to keep the furnaces warm.
'Hot idle': While LTV's steel mills will not be producting, an extension of the time they are placed on "hot idle" makes it more likely they will be sold, the Steelworkers said. 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 from Feb. 28 to 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.
shilling@vindy.com