U.S. Steel to buy National Steel

Detroit Free Press ^ | 1/9/03 | ASSOCIATED PRESS

[Hermann the Cherusker]

PITTSBURGH -- U.S. Steel Corp., the nation's largest steel maker, said Thursday it will purchase bankrupt National Steel Corp. for about $750 million.

Under the deal, U.S. Steel would also assume about $200 million of its smaller rival's debt.

U.S. Steel could increase production capacity by as much as 40 percent and expects a combined annual cost savings of about $170 million within two years of purchase, company officials said. Savings will come from a reduction in redundant overhead, transportation costs and an improved labor contract, company officials said.

[Hermann the Cherusker]

Wow!

First International Steel Group (remains of bankrupt LTV) is going to buy up bankrupt Bethlehem Steel. Now USS is gobling up bankrupt National Steel.

Just goes to show you how effective those big bad old steel tarrifs have been in allowing the industry to consolidate, as President Bush said they would.

Score another point for Bush being a political and economic genius.

Lets all be sure to remind the Steel Workerss, Coal Miners, and Iron Ore Miners in 2004 which Political Party saved their butt, and which one sat on the sidelines for eight years and tried to piss away the American Steel Industry.

Theese announcements are good news for helping Bush take PA, WV, MI, IL, and MN in 2004.

[Hermann the Cherusker]

Another good steel news bump.

[widowithfoursons]

I was a consultant at J&L Steel in Aliquippa when LTV took over. We knew they were just going to shut down the plant. That's what they hired us to do. How in h*** can U.S Steel do anything different? We're just talking Wall Street here. Has nothing to do with keeping the steel industry in the US. MORONS.

[Fiddlstix]

Bump

[Willie Green]

Another good steel news bump.

Hogwash.
Mergers and Acquisitions lead to consolidation, downsizing of capacity and less competition.

It verges on an act of Treason that George W. Bush would dictate to American private industry that they must "restructure" and yield productive capacity to foreign "competition". In doing so, he reduces our domestic steel making capabilities in a fashion that Hitler, Stalin, Mussolini, Tojo, Kruschev and Mao could only dream of. George W. Bush is a malevolent enemy of American steel production surpassing even the green-weenie intentions of Algore.

[E Rocc]

Another good steel news bump.

If I'm not mistaken, ISG would have passed US Steel as the biggest integrated steel producer in the US if they acquired Bethlehem's plants. US regains the lead by absorbing National.

ISG's execs have stated it's their philosophy to operate every plant they acquire.

-Eric

[Hermann the Cherusker]

ISG's execs have stated it's their philosophy to operate every plant they acquire.

Shhhhh!

Don't say that too loudly. You might bring obscure the dark clouds some on here prefer to dwell in with a little light.

I really doubt USS would spend $750 big ones to completely shut down National Steel. The Bankruptcy Court can do that far cheaper that USS can. USS indicated in the article that they anticipated $170 million in annual savings from combining operations. That doesn't sound like they plan on shutting down.

[Eric in the Ozarks]

The National plant at Portage is next door to USS's Gary facility, isn't it ? I believe its older than the Gary Works. Wonder why they'd (USS) have two old dogs when they could have had a much better plant at Burns Harbor (Bethlehem) ?

[Hermann the Cherusker]

U.S. Steel could increase production capacity by as much as 40 percent and expects a combined annual cost savings of about $170 million within two years of purchase, company officials said. Savings will come from a reduction in redundant overhead, transportation costs and an improved labor contract, company officials said.

Sounds like they plan on continuing running National Steel to me, which is a lot better than letting them go bankrupt and the workers there and in associated industries lose their jobs. I believe National does a lot of business with the auto companies and suppliers. So its good news for Detroit also.

Willie, please cheer up. We've seen two great announcements this week that will rescue a big chunk of American Steel capacity from bankruptcy court and the wrecking ball. Plants like Coatesville and Steelton and Ecorse that many thought were doomed are going to be renewed by forward thinking new management, freed of the burdens that previous policy directions had placed upon them.

Let me ask you, can you name any president since the 1960's (hell, the 1920's) who has shown a personal interest in the continued health of the American Steel industry, like President Bush has and worked to bring it around to profitability? What did KKKlintoon do while we watched mill after mill go bankrupt and/or be shuttered forever?

We neither need nor want the Steel Industry of 1973 back again. Even with imports (much of which by volume is low value raw slabs to inland plants like AK Middletown that provide port and railway jobs given that we do not have sufficient iron ore domestically), we use much less steel now for a much larger economy, than we did 20 and 30 years ago. We have a much more mechanized and efficient steel industry now, and we can compete as President Bush levels the playing field through Tarriffs and the PBGC. You watch!

I'm bullish on our future.

[Hermann the Cherusker]

A plant's age doesn't really indicate the age of the equipment inside it. The Bethlehem Lukens plant in Conshohocken is very old, but its Steckel Mill equipment inside is nearly brand new.

USS didn't like the look of Beth Steel about a year ago, with all the pension liabilities. They took a pass and bought the option on National instead. ISG cleverly sucked up Beth Steel last November in a 60 day agreement when no one was watching over the holidays. ISG clearly has some top notch management, and they are getting some very good and unique facilities through their leadership.

It seems like we are going to have just three large integrated players soon - USS, ISG, and AK Steel. Weirton, Wheeling Pittsburgh, Geneva, etc. are going to need to become a part of this or perish. We need companies large enough to compete for the export market again. These well run large companies are going to show the Mini-Mills a thing or two also.

[Eric in the Ozarks]

A minor point, but interesting; by buying Bethlehem, International gets a pair of modern thousand footer ore boats that run from Superior to Burns Harbor with about 70,000 tons of ore each, every 5 1/2 days. USS just got rid of their boats, but will get a couple of smaller haulers when they buy National. The odd man out in all of this is Interlake Steamship which has a good fleet but dwindling ore contracts.

[Willie Green]

Let me ask you, can you name any president since the 1960's (hell, the 1920's) who has shown a personal interest in the continued health of the American Steel industry, like President Bush has and worked to bring it around to profitability?

Ronald W. Reagan.

And Dubya sure as heck isn't any Ronald W. Reagan.

[ffusco]

Or consolidation can lead to a retrenching of a strategic commodity which has been unprofitable for decades and a spin-off of related services which can lead to new start-ups as we saw in the energy sector.

[Hermann the Cherusker]

How many mills shuttered under Reagan, and how many have under Bush?

[Willie Green]

and a spin-off of related services which can lead to new start-ups as we saw in the energy sector.

Good grief, that's all we need.
Dubya spawning a bunch of Enron-style
paper-pushing scams targeted at the steel industry.
Sheeesh.

[Willie Green]

That's precisely the point.
The industry already shuttered it's obsolete facilities and upgraded others under Reagan.
Dubya is merely attacking the industry in favor of foreign imports.

[E Rocc]

The National plant at Portage is next door to USS's Gary facility, isn't it ? I believe its older than the Gary Works. Wonder why they'd (USS) have two old dogs when they could have had a much better plant at Burns Harbor (Bethlehem) ?

It depends on a lot of things, equipment, capabilities, sizes...sometimes two plants can share certain resources. LTV ran what were two separate plants (J&L and Republic)across the Cuyahoga River from each other for years. ISG is running Cleveland East and is supposed to be considering reopening Cleveland West.

-Eric

[E Rocc]

ISG clearly has some top notch management, and they are getting some very good and unique facilities through their leadership.

In most large corporations top management is typically accountants or even lawyers. ISG seems to have a lot of engineers in high level positions, which is how the Japanese have always done it.

-Eric

[ffusco]

very astute, you must be editor of a high school paper. How about entreprenuers buying off steel services and making them more productive. Nucor is an example of smart management in action.

[ffusco]

we'll see, The mini's have been profitable, locating their smaller plants closer to sources of scrap and closer to some industries that need specialty steels. Let the big boy handle the low margin coomodity steels and Nucor will continue to sell to smaller customers that need smaller runs.