International Steel Group Inc saved the jobs of thousands of US steelworkers when it was formed two years ago. Analysts say its sale this week to a Dutch steelmaker should benefit workers again by providing job security.
Immediately after the deal announced Monday, ISG managers sought to let 12,000 employees in eight states know that its US$4.5 billion sale to steel tycoon Lakshmi Mittal could mean more work, not another round of industry job cuts.
"We're looking for opportunities to increase capacity," said ISG President Rodney Mott, who will lead the combined US operations of the company.
Mott said no plant in North America would be targeted for cutbacks or shutdown. The company's suburban Richfield headquarters will become the headquarters for Mittal's North American operations.
The takeover and the consolidation of two Mittal-controlled companies also announced on Monday will create a global metals mammoth with anticipated sales of US$31.8 billion, 73 million tonnes of steel production capacity and 165,000 employees this year, rivaling the world's largest steel and mining conglomerates.
Ron Turnick, a 28-year steelworker who was hired back by ISG this year, said he's curious to see how the deal will affect him.
"It was a shock to hear that because I didn't hear that anything like that was in the making," he said. "It was like, `OK. Am I going to be looking for another job again?'"
The takeover of ISG and the consolidation of two Mittal-controlled companies -- Ispat International NV and LNM Holdings NV -- will create a metals giant based in Rotterdam, Holland, under the name Mittal Steel Co NV.
The new company is comparable with the world's largest steelmaker, Luxembourg-based Arcelor SA, which had sales of US$33.2 billion last year and around 100,000 employees. However, despite a slew of mergers in recent years, the international steel industry remains a fragmented one, with the 10 biggest producers together accounting for less than a third of global output last year, according to the International Iron and Steel Institute, based in Belgium.
ISG was formed in 2002 after New York buyout firm WL Ross & Co. purchased LTV Corp's remnants. The company has grown into one of the biggest US steel producers by acquiring money-losing mills out of bankruptcy and making them more efficient. Its acquisitions include Acme Steel, Bethlehem Steel, Georgetown Steel and Weirton Steel, which it bought in May for US$253 million.
Mittal, a native of India who lives in London, has spent years acquiring steelmaking plants in locations ranging from the Czech Republic to South Africa to Mexico, much like ISG chairman Wilbur Ross Jr. Mittal was ranked No. 62 in the last rankings of the world's billionaires by Forbes, with an estimated fortune of US$6.2 billion.
Mittal Steel's size will provide it economies of scale in purchasing raw materials and advantages in setting global prices for steel, analysts said. The deal comes against the backdrop of rising demand for steel in China, whose appetite for oil has already contributed to rising energy prices.
TYPHOON: The storm’s path indicates a high possibility of Krathon making landfall in Pingtung County, depending on when the storm turns north, the CWA said Typhoon Krathon is strengthening and is more likely to make landfall in Taiwan, the Central Weather Administration (CWA) said in a forecast released yesterday afternoon. As of 2pm yesterday, the CWA’s updated sea warning for Krathon showed that the storm was about 430km southeast of Oluanpi (鵝鑾鼻), Taiwan’s southernmost point. It was moving in west-northwest at 9kph, with maximum sustained winds of 119kph and gusts of up to 155kph, CWA data showed. Krathon is expected to move further west before turning north tomorrow, CWA forecaster Wu Wan-hua (伍婉華) said. The CWA’s latest forecast and other countries’ projections of the storm’s path indicate a higher
SLOW-MOVING STORM: The typhoon has started moving north, but at a very slow pace, adding uncertainty to the extent of its impact on the nation Work and classes have been canceled across the nation today because of Typhoon Krathon, with residents in the south advised to brace for winds that could reach force 17 on the Beaufort scale as the Central Weather Administration (CWA) forecast that the storm would make landfall there. Force 17 wind with speeds of 56.1 to 61.2 meters per second, the highest number on the Beaufort scale, rarely occur and could cause serious damage. Krathon could be the second typhoon to land in southwestern Taiwan, following typhoon Elsie in 1996, CWA records showed. As of 8pm yesterday, the typhoon’s center was 180km
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STILL DANGEROUS: The typhoon was expected to weaken, but it would still maintain its structure, with high winds and heavy rain, the weather agency said One person had died amid heavy winds and rain brought by Typhoon Krathon, while 70 were injured and two people were unaccounted for, the Central Emergency Operation Center said yesterday, while work and classes have been canceled nationwide today for the second day. The Hualien County Fire Department said that a man in his 70s had fallen to his death at about 11am on Tuesday while trimming a tree at his home in Shoufeng Township (壽豐). Meanwhile, the Yunlin County Fire Department received a report of a person falling into the sea at about 1pm on Tuesday, but had to suspend search-and-rescue
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