WARREN Consulting firm studies feasibility of CSC buyout

THE VINDICATOR, YOUNGSTOWN
The study, the first step in an employee buyout, should be done by early April.
By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
WARREN -- A New York City consulting firm is lending its expertise to CSC Ltd. employees considering a buyout of the troubled steel mill.
Locker Associates Inc., a company specializing in buyouts, corporate feasibility studies and business plan development, was selected to perform a feasibility study, the first step in the buyout process.
CSC is under Chapter 11 bankruptcy protection, and officials have said the company cannot afford to continue operating and must find a buyer.
CSC is Trumbull County's fourth-largest employer with 1,200 hourly and salaried employees, and subcontractors employed about 800 additional workers there when the plant was in full operation.
Jerry Shirilla, a CSC executive and spokesman for the eight-person employee steering committee, said Locker was chosen from among four professional firms bidding on the job.
All recommended: All four were recommended by the Ohio Employee Ownership Center at Kent State University, a state-funded agency that helps employee groups in investigating and implementing employee stock ownership plans.
Locker representatives will meet with the steering committee and CSC managers Tuesday and Wednesday, he said. The study is set for completion in four to five weeks.
Shirilla would not divulge the study cost but said Locker agreed to do the work for less than the Ohio Department of Jobs and Family Service grant of $45,000 appropriated. The United Steelworkers of America will contribute cash or in-kind services.
Locker has directed more than 150 projects over 18 years, according to its Web site, many involving the steel industry.
The firm completed a 1999 study, which indicated an employee buyout of Washington Steel in Massillon was not feasible, and it served as adviser and expert witness for Wheeling-Pittsburgh Steel its 1999 trade case against Japanese and Russian steel firms.
Michael Locker, founder and president, has conducted more than 100 joint labor-management seminars at steel plants across North America.
Judge's OK: Judge William T. Bodoh of U.S. Bankruptcy Court in Youngstown, meanwhile, has authorized CSC to employ the Cleveland office of McDonald Investments to coordinate its search for a buyer despite objections by the U.S. Attorney's Office.
The government argued against hiring the firm because it did work for CSC before it filed for bankruptcy protection and because its fee structure for the buyer search differs from what it charged earlier.
McDonald Investments is charging CSC $50,000 a month for the first two months, with a renewal clause if needed, plus a percentage of the sale proceeds.
Attorneys for CSC have said that two prospective buyers have indicated they will bid on the plant, and U.S. Rep. James Traficant Jr., of Poland, D-17th, says he's also working with an interested buyer.
Bodoh has scheduled a hearing for 9 a.m. March 21 to finalize procedures to auction the mill.