NORTH STAR STEEL Buyer confirms plan to keep tube mill running

Plant officials expect to release details on the employees' new wage and benefit package by month's end.
By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
YOUNGSTOWN -- A French spokesman for the prospective new owner of North Star Steel's Youngstown tube plant has reiterated local officials' claims that the plant will continue operating and workers' jobs there are secure.
"We are acquiring a performing company, and we are happy to keep the management team and the work force," said Jean-Yves Le Cuziat, a spokesman for the Oil Country Tubular Division of Vallourec & amp; Mannesmann Tubes based in Boulogne, France.
Le Cuziat, responding by e-mail to a reporter's questions on the planned acquisition, said V & amp;M Tubes plans to retain the 430 employees working at the Youngstown mill and the 130 workers at the North Star Tubular Division plant in Houston.
Plans also call for hiring an additional 10 to 12 people for the administrative departments over the next four to eight weeks, he said.
Buying group
V & amp;M Tubes, which already has four tube production plants in France, four in Germany and one in Brazil, is leading the buying group offering to pay $380 million for North Star plants. It would own about 80 percent if the deal goes through.
Sumitomo Corp. of America, a New York tube maker, would own 14 percent, and its Japanese parent company Sumitomo Corp. would own 6 percent.
Le Cuziat said V & amp;M decided to spend $380 million for the North Star Tubular Division because the purchase is in line with its strategy to develop specialized business activities. North Star's Tubular Division produces seamless steel tube used primarily in the oil and gas industry.
The Youngstown and Houston plants are expected to have a positive impact on the company's earnings before interest, taxes and depreciation, he said, and will help V & amp;M promote its patented VAM tube connection process. VAM connections are used for deep underwater oil and gas drilling.
James Cowan, general manager of the Youngstown plant, said regulators with the federal Securities and Exchange Commission approved the acquisition this week.
Wage package
He said V & amp;M executives have been meeting with managers at the Youngstown plant, hammering out a wage and benefit package for employees. He expects to have the package ready to present to workers by the end of the month.
"We have marching orders to make the wages and benefits as equal as we possibly can" to what the workers are getting now, Cowan said. "They want to make the employees whole, to the best of their ability."
One difference, he said, is that the new owners won't be able to offer an employee stock ownership plan, a benefit they get now from Minnesota-based Cargill Inc., North Star's parent company. The new owners hope to offer something comparable, he said.
Le Cuziat said L & amp;M "sees no reason to change" the way staffing is handled at the Youngstown and Houston plants, despite the cyclical nature of the oil and gas business.
The plants have no written policy limiting layoffs, Cowan said, but it has never laid off regular employees in the past 16 years, even when production was at 50 percent of capacity this January and February. "They seem to be saying they want to mirror what we have done simply because it's been so successful," he said.
Cargill, in announcing the tubular division sale last month, said the Youngstown and Houston plants have a manufacturing capacity of 550,000 net tons per year and is one of the lowest-cost Oil Country Tubular Goods producers in the United States.
vinarsky@vindy.com