- The Washington Times - Wednesday, February 18, 2004

WEIRTON, W.Va. (AP) — Bankrupt Weirton Steel Corp. has accepted a $255 million buyout offer from Ohio’s International Steel Group Inc., an industry giant built from the remnants of down-and-out companies.

The long-anticipated purchase would expand the nation’s No. 2 integrated-steel maker to include Weirton’s tin-plate mill, one of the largest in the country. ISG would become the No. 1 integrated-steel producer, a union official said.

If approved by the bankruptcy court, the deal would end a labor legacy at the West Virginia plant, once the largest American company owned 100 percent by its workers. Weirton employees now own only 21 percent.

The $255 million offer included cash and the assumption of Weirton Steel’s liabilities. Company spokesman Gregg Warren declined to release details of the offer, saying they would be included in a bankruptcy court filing.

After Weirton files the details of ISG’s offer with U.S. Bankruptcy Court in Wheeling, W.Va., in the next few days, a judge will solicit other bids. It may take as long as 45 days to complete the sale.

Weirton Chief Executive Officer D. Leonard Wise called the merger good news for the company, its customers and the community.

“Our goal has been to secure the best possible solution for all of our stakeholders and to maintain a steel operation in Weirton,” Mr. Wise said in a statement yesterday. “We believe ISG provides the answer.”

“We think it’s essential to move toward further consolidation of the industry,” ISG Chairman Wilbur Ross said in a telephone interview from New York. “We’ve been speaking for quite a while about the need for there being a smaller number of quite a bit larger companies that are more diverse.”

Weirton Steel, the nation’s fifth-largest integrated producer and No. 2 producer of tin-plated steel, sought Chapter 11 bankruptcy protection in May after 2losing money for five years.

It has struggled ever since to emerge, unable to appease creditors or reach a new agreement with its 2,700-member Independent Steelworkers Union.

Since 1998, 42 American steel companies have declared bankruptcy and more than 50,000 steelworkers have lost their jobs, according to the United Steelworkers of America union.

U.S. companies and workers largely blame the failures on a glut of steel worldwide and competition from foreign companies that are subsidized by their governments. President Bush in March 2002 imposed tariffs on foreign-made steel products to give the industry time to regroup and shore up political support in steel states such as Pennsylvania, Ohio and West Virginia.

Mr. Bush abandoned the tariffs in December — 15 months early — saying they had done their job. At the time, the administration was being pressured by the prospect of more than $2 billion in retaliatory trade sanctions from the European Union, which objected to the tariffs. The decision to back away from the tariffs angered steel-company managers and workers, though it is not clear how the 2004 election might be affected.

In tight races, Mr. Bush lost Pennsylvania but won Ohio and West Virginia in the 2000 election. Together, the three states will account for 46 of the 270 electoral votes needed for election in 2004, according to the Federal Election Commission.

Weirton Steel was further hurt in recent weeks by a shortage of coke, the fuel used for its two blast furnaces, and had to idle one furnace. This led to at least 800 layoffs.

About 1,100 union and nonunion jobs may be eliminated, depending on whether ISG operates one or two blast furnaces. That would leave Weirton with a work force of more than 2,000. Mr. Ross said the final figure would be announced soon.

Weirton Steel, located in West Virginia’s Northern Panhandle and sandwiched between Ohio and Pennsylvania, was part of National Steel Corp. for decades until workers bought it in 1984. They had to begin selling stock to outsiders in 1989.

Staff writer Jeffrey Spar-shott contributed to this report.

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