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Mon, May 05, 2008 - Page 10 News List

Union yet to weigh in on Essar Steel's takeover of Esmark

AP , WHEELING, WEST VIRGINIA

Days after the deal was announced, the United Steelworkers union has yet to weigh in on Esmark Inc’s plans to accept a US$670 million buyout offer from India’s Essar Steel Holdings.

Several local union leaders said on Friday they have too little information to either endorse or oppose the buyout, valued at US$1.1 billion when Esmark’s debt is included.

The union’s current contract, which expires on Sept. 1, gives it the right to reject any deal that changes control of the company.

Esmark last year bought twice-bankrupt Wheeling-Pittsburgh Corp, which has steel plants in West Virginia, Pennsylvania and Ohio.

Formerly headquartered in Illinois, the newly merged company employs a total 3,700 people.

Ken Aspenleiter, president of United Steelworkers union Local 1190 in Steubenville, Ohio, said the five local presidents, two contract coordinators and some staff members met on Thursday to discuss the situation, “but we know hardly anything.”

Union leaders are unhappy that they learned of the sale through the media, rather than from Esmark chief executive James Bouchard, he said on Friday.

“No matter who the new partners are, we’re looking for a long term commitment from them to steelmaking,” Aspenleiter said. “We’re looking for a collective bargaining agreement that’s fair to us and to our retirees.”

Rocky Brown, president of the local in Yorkville, Ohio, told West Virginia Public Broadcasting the union is not yet ready to endorse, but hopes for more information soon.

“Maybe Mr Bouchard should read our contract — he’d have an understanding he can’t do things without our agreement,” Brown said.

Bouchard told investors this week that Esmark needed a strategic partner in light of spiraling raw material and transportation costs, difficulty securing long term credit and investment challenges.

Hours after its announcement, Esmark reported a fourth quarter loss of US$12.3 million, or US$0.76 per share. That compares with a loss of US$5.6 million for the same period a year earlier, or US$1.40 per share.

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