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LTV plans to close
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November 21, 2001: 8:57 a.m. ET
Steelmaker asks bankruptcy court to allow asset sale; union vows to fight move.
By Staff Writer Chris Isidore
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NEW YORK (CNN/Money) - LTV Steel Corp. asked the bankruptcy court for permission to cease operations and sell its assets, although the United Steelworkers union and elected officials vowed to try to save the nation's No. 3 steelmaker.
The company said in a bankruptcy court filing late Tuesday afternoon it no longer had the cash or other sources of capital to continue operations. The company said the United Steelworkers had not offered enough concessions to allow the company to secure a $250 million federal loan guarantee.
"After so many months of commitment and hard work by all parties, it is very disappointing to find our road to success blocked at this critical time," said a statement from LTV CEO William Bricker.
But the union said it still was negotiating with the company's creditors when it learned of the company's filing and it termed the move reckless and irresponsible. In addition to representing active hourly employees at LTV, the union was negotiating over the status of laid-off members and retirees who receive health-care benefits.
A statement from USW President Leo Gerard said LTV had not even seen the union's latest offer when it filed to shut down, and that Bricker was denying to the union that it had filed to shut down even after its statement was released to the press.
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LTV Corp. is proposing halting steelmaking operations and selling its steel mills, such as this one in Cleveland, saying it does not have the cash to continue operations. | |
"For the top management of LTV to have reverted to its earlier destructive tactic of misinformation and needless confrontation raises serious questions as to whether shutting down its operations to break its contractual commitments to our members hasn't been their strategy from day one," Gerard's statement said. But he said the union would continue to seek an agreement that would keep the company operating.
LTV's filed for bankruptcy court protections last December. An increase in steel imports has hurt the U.S. steel industry, prompting President Bush to announce in June he would move toward possible limits on imports. But those limits have yet to take effect.
LTV and other integrated steelmakers who make steel from iron ore and other raw materials also have been hurt by rising competition from nonunion "minimill" operators who melt scrap into steel. Nucor Corp. (NUE: Research, Estimates), the largest steel minimill operator, recently moved past LTV to become the nation's No. 2 steelmaker.
The bankruptcy filing and financial problems cost LTV some key customers, notably General Motors Corp. (GM: Research, Estimates), the world's largest steel user, who were concerned about its ability to continue operations. The problems affecting LTV also forced competitor Bethlehem Steel Corp., the nation's No. 5 steelmaker, to file for bankruptcy protection last month.
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LTV said it is proposing putting its steel mills in Cleveland and East Chicago, Ind., and a steel finishing plant in Hennepin, Ill., on "hot idle" for the next 60 days, a move that would allow potential buyers to restart steelmaking operations at a lower cost. Plants in Chicago and Warren, Ohio, that make coke, one of the raw materials used to turn iron ore into molten steel, will be put on cold idle. 
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