C1 Blast furnace restart - 400 steelworkers recalled
CLEVELAND, Feb. 5 /PRNewswire/ -- LTV Steel (OTC Bulletin Board: LTVCQ)
today said that it is restarting a blast furnace, steelmaking shop and hot
strip mill, which have been idle since November 2000, at its Cleveland Works
integrated steel plant. 400 employees began returning to work on Sunday,
February 4. Approximately 200 employees remain laid off or assigned to lower-
paying jobs at the plant. The additional production will be shipped to LTV
Steel's Hennepin, Illinois finishing plant to satisfy increased orders for
cold rolled and galvanized steel, and to increase inventories in preparation
for a reline of a blast furnace at LTV's Indiana Harbor Works.
LTV Steel usually produces steel for the Hennepin Plant at the Indiana
Harbor Works. However, the Indiana Harbor Works cannot increase the output of
its two blast furnaces without using natural gas, which is prohibitively
expensive. LTV's Cleveland and Indiana Harbor blast furnaces are currently
using lower cost fuel oil, which results in lower furnace productivity than
natural gas. Consequently, the most economical way to increase steel
production is to restart the C-1 blast furnace at the Cleveland Works. C-1
was removed from service for relining and repair in November of 2000. The
furnace has remained idle because of high levels of unfairly traded imports
and low steel prices.
LTV Steel said that while it is currently experiencing higher incoming
order rates, the overall level of orders remains well below last year. The
Company also said that continuing operation of C-1 blast furnace and its
related steelmaking and rolling operations depends on future order rates and
energy costs.
"The domestic steel market continues to be distorted by high levels of
unfairly traded foreign-made steel which have driven prices down to 20-year
lows," said Richard J. Hipple, President, LTV Steel. He said that the
situation is now being compounded by a downturn in the automotive sector.
"We urgently need the Federal government to address the steel trade crisis
in an effective, timely manner. It is frustrating that the future of the
steel industry in the United States, and the well being of hundreds of
thousands of steelworkers and retirees, depends on the resolve of the federal
government to enforce our trade laws," Hipple said. "In the meantime, we are
aggressively doing everything we can to respond to the immediate challenges
facing LTV Steel. We are aggressively implementing cost reduction measures
that will have far-reaching benefits."
Hipple noted that LTV Steel continues to implement and benefit from
actions designed to convert fixed costs into variable costs, including the
permanent closure of LTV's Pittsburgh Coke Plant and Minnesota iron mining
operations. These units had reached the end of their economic lives and were
unable to provide high quality raw materials at competitive costs. LTV Steel
now purchases a major portion of its iron ore and metallurgical coke on the
open market. Hipple also said that these and other actions have reduced LTV
Steel's workforce by about 26% and enabled the company to avoid approximately
$1 billion in future capital investments. He also cited the consolidation of
the Cleveland Works Finishing departments and the installation of advanced hot
dip galvanizing technology at Columbus Coatings Company as measures designed
to enhance LTV's ability to produce high-quality, value-added products for the
automotive and other quality-critical markets.
The LTV Corporation is a manufacturing company with interests in steel and
metal fabrication. LTV's Integrated Steel segment is a leading producer of
high-quality, value-added flat rolled steel, and a major supplier to the
transportation, appliance, electrical equipment and service center industries.
This press release includes forward-looking statements. Our uses of the
words "outlook," "anticipates," "believes," "estimate," "expect" and similar
words are intended to identify these statements as forward looking. These
statements represent our current judgment on what the future holds. While the
Company believes them to be reasonable, a number of important factors could
cause actual results to differ materially from those projected. These factors
include relatively small changes in market price or market demand; changes in
domestic capacity; changes in raw material costs; increased operating costs;
loss of business from major customers, especially for high value-added
product; availability of post petition financing; negative market and credit
impact from the Chapter 11 filing; unanticipated expenses; substantial changes
in financial markets; labor unrest; unfair foreign competition; major
equipment failure; unanticipated results in pending legal proceedings;
difficulties in implementing information technology; and other factors. |
