Wednesday, October 31, 2001
Today's bidding included the thermal treatment and finishing operations.
By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
CLEVELAND -- The last shred of hope that a buyer might buy part of CSC Ltd. and operate a part of the idle Warren steel mill was shattered when no bidder offered to buy a packaged section of equipment this morning.
There was speculation that Ellwood Group Inc., a Pennsylvania metal fabricating company that offered $2.4 million for the thermal treatment and finishing operations in July, might return to try again today.
It did not, said Don Caiazza, a CSC executive attending the second day of the company's bankruptcy court-ordered auction, and no other bidder made an offer.
When attempts to sell the thermal treatment and finishing operations as a package were unsuccessful, the auctioneer began selling the equipment piece by piece.
Officials won't reveal how much money was raised in the piecemeal auction of tools and equipment from 60 years of steelmaking at CSC Ltd. until the final bid is in, sometime after 4 p.m. today.
Hope for an intact sale of the steel bar mill were dashed Tuesday when no bidder offered to buy CSC in its entirety.
The auctioneer's offer of all the real estate the mill occupies on Mahoning Avenue N.W. and another offer of all the equipment and machinery in the plant were also met with silence in the first day of bidding.
There was some expectation remaining when bidding opened today that some sections of the plant might be operated by new buyers.
What was tried: The auctioneer offered some large operating sections, such as the thermal treatment and finishing equipment, in "packages" to allow a buyer to bid on them as a group.
If equipment had been sold in a package, the new owner would likely have weighed 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. After about two hours of bidding today, however, Caiazza said that did not appear to be happening.
Michael Fox International, the Baltimore-based auctioneer handling the sale, was selling more than 1,800 pieces of furniture, tools and equipment from the mill, sometimes for pennies on the dollar.
The continuous caster and the melt shop, two major parts of a $100 million modernization project that was under way at the mill when it filed for Chapter 11 bankruptcy protection in January, sold for $6 million before the auction to a company outside the United States.
Caiazza acknowledged that the price was a fraction of what the equipment was worth. He noted, however, that installation costs are very high for large industrial equipment and made up as much as half the cost of CSC's improvement project.
How sale went: Prices for other, smaller items generally ranged from $20 to $1,000 or less, with a few exceptions. One buyer purchased 14 railroad cars for $750. Another bought a 40-ton grapple hook for $100.
Thomas Kelly, a retiree who lives on Youngstown's South Side, was one of about 120 registered to bid at Tuesday's auction -- officials said another 40 had registered as online bidders.
Kelly bought a pickup truck but wouldn't say how much he paid. "Did I get a good deal?" he said. "I won't know until I try to start it up."
Bob Mullholland of Arcadia, Ohio, was one of many small business owners attending the sale in search of bargains. A scrap metal dealer, he said he's been going to more auctions lately.
"More businesses are shutting down," he said. "For me, that's more opportunities to help pay the bills."
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 its plant modernization.
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