United Steelworkers Union Set to Fight Esmark-Essar Deal

By The Associated Press

WHEELING The United Steelworkers says it will fight steelmaker and distributor Esmark Inc.s plans to accept a $670 million buyout offer from Indias Essar Steel Holdings. The USW sent a letter to Esmark on Friday demanding that the company reject its agreements with Essar, saying the deal violates the unions contract with Esmark. The contract, which expires Sept. 1, gives it the right to reject any deal that changes control of the company. It contends that Esmark didnt give it adequate notice and an opportunity to offer an alternative proposal before accepting Essars cash buyout offer. Esmark also has agreed to pay Essar a $20.5 million fee if Essars proposed buyout offer fails. The USWs rights under the Right to Bid clause clearly prohibit the Company from entering into these agreements and we will take whatever action is necessary to protect these rights, Dave McCall, director of USW District 1 in Columbus, Ohio, said Friday in a news release. An Esmark spokesman did not immediately return a telephone message Friday. Last year, the union sided with Esmark in the companys takeover of twice-bankrupt Wheeling-Pittsburgh Corp., which has steel plants in West Virginia, Pennsylvania and Ohio. The merged company employs 3,700. It is quite frankly offensive that after the support Esmark received from the Steelworkers to get control of the company in the first place, that they would simply ignore the agreement they made with us, USW President Leo Gerard said. This will not be allowed.

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