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Sale trustee set to visit Sparrows Point today

The Baltimore Sun

The court-appointed trustee overseeing the sale of Sparrows Point will make his first visit to the plant today as he works to find a new buyer for the Baltimore County steel mill.

Joseph G. Krauss, a partner at the Washington law firm Hogan & Hartson LLP, said in an e-mail that he and his team want to learn more about the operations of the 118-year-old plant. Krauss restarted the sale process last month after a $1.35 billion deal to sell the plant to Chicago Heights, Ill.-based Esmark Inc. and several partners unraveled.

While Esmark prepares another bid for the plant with yet-to-be named partners, the trustee has enlisted an investment bank to vet all offers.

Newly merged Arcelor Mittal agreed a year ago to sell the plant to satisfy Justice Department antitrust concerns over its tin plate production.

That means the plant's 2,400 workers will have their fourth owner in four years amid an industry shake-up that has left many on edge.

Today's visit from the trustee comes as a rift is developing among the plant's union members over a new owner. The United Steelworkers union has backed a second bid by Esmark, but a small faction of workers opposes the union's endorsement. Union approval is required for any deal to go through.

A petition circulating at the plant asked workers to oppose any new bid by Esmark, largely because it has been unable to make twice-bankrupt Wheeling-Pittsburgh Corp. profitable, losing $158 million in the first nine months of last year.

Esmark co-founder Craig T. Bouchard told workers at a September rally that he would ramp up slab production but make Wheeling-Pitt the primary finishing facility. That plan pleased workers on the steelmaking side, but those in the cold mill and tin mill worried that they could lose work - and production bonuses - if Esmark reduced volume.

Cold mill workers produce metal sheet, which customers turn into such things as appliances and car chassis.

As a result, more signatures on the petition come from the cold side as opposed to the hot side.

At Mickey's, a bar and take-out restaurant on North Point Boulevard where many workers cash their checks, reaction to the petition depended on where they worked.

"Each side of the plant is looking out for its own well-being," said Bill Goodman, an electrician in steelmaking who declined to sign the petition.

Bob Burns, who works in the cold mill and circulated the petition, said he has about 300 signatures - well short of the 1,000 he had hoped to collect. He said he told his "small army" to stop collecting them yesterday because he feared retribution. But he said he still plans to send copies to the trustee, the Justice Department and members of Congress.

"This is about people, employees of Sparrows Point, trying to get this stopped because the international has sanctioned" a new bid by Esmark, Burns said.

An Arcelor Mittal spokesman said yesterday that he was unaware of the petition and could not comment on it.

Bouchard said in an e-mail yesterday that his strategy is to increase production on both sides, not cut it. "Most of the people that have followed it closely know that cold-rolled product is our specialty and that we would increase emphasis on this area."

Arcelor Mittal in September agreed to sell the plant to the Esmark-led team, called E2 Acquisition Corp., but two partners - a Brazilian iron ore company and a Ukrainian steelmaker - walked away after the parties failed to agree to certain terms by a Nov. 30 deadline. Bouchard, who was chief executive of E2, said he expects to name new partners soon.

John Cirri, president of Local 9477, which represents hourly workers at the plant, said he stands with union leadership in supporting Esmark as a bidder.

But, he said, Burns and the others who signed the petition have a right to their opinion and that any retribution would not be tolerated.


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