CLEVELAND CSC being auctioned piecemeal

An Ellwood City company that bid on part of the mill in July wouldn't say if it would try again today.
By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
CLEVELAND -- Disappointed but still holding on to a glimmer of hope, a CSC Ltd. executive said today's bidding in the two-day CSC Ltd. auction may reveal whether one or more parts of the steel bar mill will continue operating.
Hope for an intact sale of the idle, 400-acre steel bar mill were dashed Tuesday when no bidder offered to buy CSC in its entirety. The company filed for Chapter 11 bankruptcy protection in January and is selling the property to help pay its debts.
An offer of all the real estate the mill occupies on Mahoning Avenue N.W. in Warren and another offer of all the equipment and machinery in the plant were also met with silence in the first day of bidding at a Cleveland hotel.
But Don Caiazza, a former CSC president and 22-year employee at the steel bar mill, said today's bidding will include the thermal treatment and finishing operations and a large rolling mill, both of which have stirred some interest among prospective buyers touring the plant in recent weeks.
What was planned: The auctioneer plans to offer all equipment related to those two steel-processing sections in packages to allow a buyer to bid on them as a group.
If equipment is sold as a package, the new owner will likely weigh the cost of moving the equipment against the cost of operating it in place at the Warren site, according to a spokesman for Michael Fox International, the Baltimore auctioneer handling the sale.
If a buyer decides to operate at the former CSC site, it would have to negotiate for the sale of the real estate.
"The critical word is uncertain," Caiazza said. "You keep holding out for some glimmer of hope that maybe something good will happen."
CSC employees have been speculating for months that a bidder which tried unsuccessfully to buy part of the mill four months ago might try again.
Ellwood Group Inc., a privately held metal fabricating company based in Ellwood City, Pa., offered $2.4 million for the thermal treatment and finishing operations in July, but its bid was thrown out because the company was looking for a buyer to operate the mill as a whole.
Marsha Rutter, an Ellwood Group spokeswoman, said the company will not comment on whether it plans to bid on the operation again.
Others have also shown interest, according to Fox spokesman Lou Goldberg.
"There have definitely been parties looking at the items over the past several weeks and months," Goldberg said, referring to the thermal treatment and finishing and rolling mill.
"But I'd never speculate on whether they'll be there to bid or how much they'll offer. With auctions, you just never know what to expect."
What was sold: Caiazza said a steelmaker outside the United States paid $6 million just before the auction for the continuous caster and the melt shop, two of the largest and newest pieces of equipment at the mill.
Caiazza could not provide the buyer's name or say whether the new owner plans to keep and operate the equipment in Warren or move it. Sale terms set by U.S. Bankruptcy Court required buyers to pay at least 70 percent of the appraised price for major equipment bought before the auction.
Goldberg said the amount raised will be made public after the auction is over, probably around 4 p.m. today, he said.
Company history: Once the fourth-largest employer in Trumbull County with a $4 million monthly payroll, CSC had 13 consecutive profitable quarters from October 1995 through December 1998.
It ran into financial problems just as it was completing a $100 million plant modernization project in 1999.
The company borrowed heavily to pay for the improvements, and it lost the support of its lenders around the same time that the domestic steel industry was grappling with a glut of discounted foreign steel.
CSC ran out of cash and halted operations in April, leaving 1,375 hourly and salaried workers jobless.
vinarsky@vindy.com