STEEL INDUSTRY LTV plant deal postponed by customer's woe
Warren Coke Corp., an affiliate of Tonawanda Coke Corp. of Tonawanda, N.Y., had planned to buy the plant for $1 in U.S. Bankruptcy Court in Youngstown today.
The deal was postponed, however, when Warren Coke learned one of its customers would be unable to follow through with its plan to buy coke from the Warren plant.
Heather Lennox, an attorney for LTV, told Judge William Bodoh in a hearing in bankruptcy court that the companies were still trying to work out an arrangement to save the sale. This morning's hearing was adjourned until this afternoon to give them time to make a deal.
She said the customer was talking to a second customer to see if they could both make commitments to buy coke from the plant, thus reducing the amount each would have to buy.
WCI involved: An attorney representing WCI Steel in Warren acknowledged after the hearing that the Warren steelmaker is one of the two potential customers but declined to comment further.
Lennox said all of the companies are trying to move quickly because LTV intends to shut down the coke plant at the end of the day Thursday if no purchase agreement is signed by then.
LTV has been keeping the plant's furnaces warm, but that was to end tomorrow. If the plant wasn't sold, LTV was going to close the plant completely.
Once coke furnaces are shut down, they suffer severe damage, which makes it unlikely that they would be restarted. Coke is used in the process of making steel.
LTV also is trying to sell a coke plant in Chicago and three steel mills, including one in Cleveland. Those plants also are being idled and have more than 7,000 people on layoff.
Here's the situation: Cleveland-based LTV, which shut down production at the plant a month ago, could avoid millions of dollars in expenses if the coke plant could be sold. Closing the plant would cost $2 million, plus millions more in environmental cleanup.
Tonawanda also has a coke plant just north of Buffalo, N.Y. The company accepted applications from laid-off LTV workers this week. Workers said they were told the company wanted to have a work force in place to restart production.
At LTV's request, Judge Bodoh voided the company's labor contract last month with the United Steelworkers of America for its coke plants and steel mills.
The Warren coke plant had 185 hourly workers and 30 salaried workers.
LTV Copperweld, a metal fabricating business, is continuing to operate as LTV tries to sell that business. It has about 3,700 workers nationwide, including about 120 in Youngstown. LTV Copperweld workers are continuing to work under the labor contract provisions.
LTV filed for bankruptcy protection in December 2000 but said last November that it was liquidating the company because it was out of customers and nearly out of cash.