Apr 14 2003
In the ongoing battle to acquire the assets of bankrupt National Steel, US Steel have upped their bid by $25 million to $775 million. Their bid is still short of AK Steel’s offer of $925 million, of which both include the assumption of approximately $200 million in debt.
The increased offer now takes into account National Steel Pellet Company, which produces iron ore pellets for steel production. National Steel Pellet also employs about 500 people.
While the AK Steel bid looks more attractive, AK Steel failed to negotiate a labour agreement with the United Steelworkers of America last week. In contrast, US Steel won a labour agreement, which has helped its bid substantially.
The final bids for National Steel which were supposed to be submitted by last Thursday, before National Steel selects the winning offer on April 16. This will be brought before the bankruptcy court on April 21.
The bids were supposed to include labour agreements to protect the workforce of National Steel, although both bidders have stated that their bids were dependent on negotiating new labour contracts to reduce costs.
US Steel has a workforce of about 28,500 persons of which about two thirds are union members. AK Steel employs about 10,000 people of which less then 20% are union members. AK Steel has also imposed a three year lockout from its plant in Ohio, which has always had them in a difficult position when dealing with the USWA.
A decision now hangs in the balance as National Steel weighs up cash and labour.
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