LTV STEEL 3 weeks to find buyer for plants

A judge approved a compromise plan to keep LTV plants idling as sale efforts continue.
By DON SHILLING
VINDICATOR BUSINESS EDITOR
YOUNGSTOWN -- The clock has started for those trying to save LTV Corp. plants.
Judge William Bodoh of federal bankruptcy court approved a compromise plan Friday that was reached by the Cleveland-based steelmaker, its banks and those opposing its original sale plan.
The order places LTV's coke plants in Warren and Chicago on low production for three weeks. The United Steelworkers of America, creditors and community officials opposed LTV's original plan to shut down the coke plants immediately.
Tim Grendell, an attorney for the city of Warren, said city officials would like to have seen more time to work on selling the plant.
"We're going to have to hustle," he said.
Once a coke plant is shut down it is inoperable because of damage to the equipment. The Warren plant employs about 200.
Mark Tomasch, an LTV spokesman, said several companies have finished touring the coke plants but none has made an offer. Company officials will wait to see if anything changes to make these companies pursue a purchase, he said.
Tubular: The future of LTV's tubular plant in Youngstown also is up in the air. The plant, which employs about 80, makes pipe for oil and gas drilling. The division also has an office in Youngstown with 40 people.
LTV wants to sell its tubular division eventually, but for now will continue operating it. The company wants to cancel its labor contract with the Steelworkers, however, and a court hearing is scheduled Dec. 19.
Mark Shaw, a Steelworkers staff representative, said he hopes LTV and the union can settle the contract issue before the hearing. He said having the tubular and LTV Copperweld plants operating gives the union leverage in negotiating with the company.
He said a strike at the tubular and Copperweld plants would be devastating to the company because they are its only profitable units.
Steel mills: LTV's steel mills in Cleveland and Indiana also face a deadline for finding a buyer. The order says the plants, which employ about 7,000, must operate on "hot idle" until at least Feb. 28. Shaw said the company would need less than 100 workers to maintain the plants on idle status. Idling keeps the mill warm so it is easier to restart, if sold.
LTV had wanted to idle the plants for only 60 days, but creditors and others pushed for February because they think the state of the domestic steel industry will improve if President Bush levies tariffs on certain types of imported steel as expected.
Federal loan: Steelworkers and federal representatives from northeast Ohio also are pushing for changes in federal law to increase the chance of LTV qualifying for a $250 million federal loan guarantee.
U.S. Rep. Dennis Kucinich, a Cleveland Democrat who has been critical of LTV, said another company will have to operate the mills if the guarantee is approved. LTV officials have shown they want to liquidate, not save, the company, he said.
"These are the gravediggers. We want people who are going to bring the mill back to life," he said.
Tomasch said the loan would not be enough for LTV's steelmaking operations to survive. It would need hundreds of millions dollars more to cover operating costs and losses that would be incurred as the company built up its customer base, he said.
Retirees: Also facing a deadline are the retirees, which include thousands in the Mahoning Valley, who receive benefits from LTV.
LTV spends about $140 million a year to cover the health-care costs of retirees, but those benefits would end if the union contract is terminated in court.
LTV also is on the verge of getting out of its pension obligations, but the basic benefits of the LTV plan would be covered by the federal Pension Benefit Guaranty Corp.
Shaw said that once those health-care and pension obligations are removed, buyers should be more interested in LTV's steel mills. LTV said it tried to sell the mills earlier this year but was unable to.
Richard McLaughlin of Hatch Consulting testified for the creditors this week that both steel mills are in good enough condition that they are in the top half of all hot-rolled mills in the country.
shilling@vindy.com