Buyer in Place for LTV

Ferrous scrap dealers who sell to LTV’s integrated steelmaking facilities in Ohio and Indiana will soon know the results of the bidding process for the idled mills.

According to a report in the Wall Street Journal, the winning bidder will be a New York-based buyout firm.

The New York firm, W.L. Ross & Co., is named after “turnaround” guru Wilbur Ross, who is known for buying distressed companies and turning them around rather than liquidating them.

According to the Cleveland Plain Dealer, Ross has provided advice for the reinvigoration of such companies as Trump’s Taj Mahal casino, Orion Pictures and Eastern Airlines. More recently, his WL Ross & Co. firm has invested in the Planet Hollywood restaurant chain and a Tokyo-based auto parts maker. 

LTV Corp., the bankrupt Cleveland-based company, and its creditors are expected to decide on a winning bid today and announce the results as soon as tomorrow. U.S. Steel Corp., Pittsburgh, is reportedly also among the bidders for the company’s plants, which include two large integrated complexes in Cleveland and East Chicago, Ind.

According to a Reuters report, the other bidder was a group of former LTV managers based in Cleveland.

Although initial reports had as many as ten companies rumored to be involved in the bidding, sources have more recently reported the narrower field of three.

If the auction process is completed as scheduled, LTV will have found a buyer for the plants within days of its deadline for removing the furnaces from “hot idle” and shutting them down, possibly for good.

While the Cleveland-based management team is reportedly bidding in order to keep the Cleveland mill running, it is less clear which operations U.S. Steel or the New York-based buyout firm would keep in operation.

According to the Wall Street Journal report, W.L. Ross & Co. will attempt to strike a deal with the United Steelworkers to keep the mills running, but picking up health care costs of LTV retirees will not be part of that deal.

Steel workers' unions and integrated steel companies my jointly push the federal government to pick up health care costs for the industry's retirees as a means of keeping the American steel industry competitive.