Hope for smelter restart persists
Tuesday, September 2, 2003 8:17 AM PDT
By Pat Forgey
Printable version
E-mail this articleLongview Aluminum is down, and has been for two and a half years, but whether it's out is still up for debate.
A trustee appointed by the bankruptcy court, Bill Brandt of Development Specialists, Inc., in Chicago, has said he'll try to restart the mill if that's the best way to pay off creditors. Local residents formerly employed by the smelter say they'd like to see it restart, but over the last year and a half they've become increasingly disbelieving that it ever will.
Now, two key creditors who are owed money by Longview Aluminum said in interviews last week that they're not ruling out the possibility of the plant restarting, even while acknowledging the many difficulties it faces.
One is Joseph Baldi, the bankruptcy trustee for McCook Metals, another company once owned by Longview Aluminum Chairman Michael Lynch of Chicago. Baldi has accused Lynch of "looting" McCook when Lynch used $6 million of McCook funds in the purchase of Longview Aluminum. Baldi is seeking the money back for McCook creditors. Lynch, in court filings, had denied that accusation and disputed Baldi's claim on Longview Aluminum.
Baldi told The Daily News that he'd support an attempt by Longview Aluminum's trustee to restart the smelter if that is the best way to pay off creditors. Baldi added that if the trustee comes up with a viable business plan that has the smelter operating again, he won't stand in the way.
Baldi added that Brandt, Longview Aluminum's trustee, is not a typical bankruptcy trustee. The trustee's company, Development Specialists Inc., specializes in corporate restructurings.
"He's not a lawyer, he's a businessperson. If there's a way to restart it, he's got the skills to put it together," he said.
Still, Baldi said his experience in dealing with the metals industry has told him how hard it will be to resurrect the smelter.
"People tell me that the smelting business is very, very difficult," he said.
The other Longview Aluminum creditor supporting restarting the smelter is the United Steelworkers of America union, said steelworkers attorney David Jury of Chicago.
The steelworkers have two goals: getting jobs for members and getting Longview Aluminum to pay for unpaid wages and benefits that the union says it is owed. The best way to accomplish both those goals would be to have the smelter restart and operate profitably, Jury said, and that's what he'd like to see.
"We are committed to exploring it with any party that is interested in doing a restart," he said.
Though a trustee eventually sold off the assets of McCook Metals piecemeal, Jury said the union strongly supported the appointment of a trustee in the case of Longview Aluminum.
"We wouldn't have done that if it had meant automatic liquidation," he said.
And Jury also echoed Baldi's confidence in Longview Aluminum trustee Brandt's abilities.
"Mr. Brandt is a very experienced workout/restructuring professional," he said.
The union has already been in contact with Brandt regarding options for the plant, he said, but no decisions have been made yet.
Among the difficulties any restart plan would have to overcome is the legacy of two and a half years of Lynch's ownership, including strained relations with the unionized workforce, millions of dollars in unpaid power bills to the Bonneville Power Administration, and sold-off assets. At the same time the current combination of high power prices and low aluminum prices appear to make aluminum production unprofitable.
Most of the Northwest's aluminum smelters shut down during or after the West Coast power crisis, and Jury said he was well aware of the difficulty the industry faced because so many of its workers were represented by his union.
"It's a very distressed business in the Pacific Northwest," he said.
Lynch still technically owns the smelter through his position as chairman of Longview Aluminum LLC, but he has lost authority to make decisions for the company with the appointment of a bankruptcy trustee. Lynch did not respond to an interview request through spokeswoman Holly Bartecki.
Lynch filed for bankruptcy protection for Longview Aluminum in March, and spent the months since then trying to put together a deal to restart the mill, hiring investment banking and other experts. By late July he gave up on that effort, saying the only solution was to wait for market improvements. In response, U.S. Bankruptcy Court Judge Eugene Wedoff of Chicago, turned control of the plant over to trustee Brandt.
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