Lynch to union: Let's restart smelter
Wednesday, November 12, 2003 8:42 AM PST
By Pat Forgey
Printable version
E-mail this articleLongview Aluminum chairman Michael Lynch said he'd like to buy the smelter from the bankruptcy court in partnership with its union workers. A local United Steelworkers of America representative says the union still wants to save the smelter, but doesn't want to do business with Lynch.
"I made an offer to the steelworkers," Lynch said Tuesday, in which he'd put up $12 million and the union $10 million to buy the plant from the bankruptcy court for $22 million.
The deal would give Lynch and his partners a majority interest in and control of the new company. Lynch said he'd then raise additional money from his business contacts to restart the plant when the aluminum business improves with either higher aluminum prices or lower power prices.
"Despite what people say, we've done very well. We have the capital to start this asset," he said.
Lynch acknowledged a poor relationship with the smelter's workers in the past, but said his proposal could save the plant's 900 jobs for Longview.
"We're still waiting back for the steelworkers to see if they're interested in partnering up with us," he said.
Local steelworkers union representative Gaylan Prescott, holding vigil Tuesday with other employees outside the gates of the closed plant, said he doubted the union would be interested in any further relationship with someone they hold responsible for the failure of Longview Aluminum.
"The steelworkers have not been entertaining any kind of deal-making offers that include Michael Lynch," he said. "His credibility with our organization is zero."
Bill Brandt, a trustee appointed by the bankruptcy court in Chicago, was unsuccessful in trying to sell the plant as a going concern and now wants to sell off its equipment and liquidate the plant. Brandt said he's rejected an offer from Lynch alone in the past to buy the plant, but didn't say how much was offered.
Prescott said the union was trying to get a 90-day delay in plans to liquidate the plant and hoping to convince its creditors to support such an effort. Lynch's involvement in the process wouldn't help, he said.
Two other Lynch plants, McCook Metals in Chicago and Scottsboro Aluminum in Alabama, were liquidated under Lynch ownership, each costing 600 steelworker jobs. Prescott said that track record means Lynch's help wouldn't be valuable in getting Longview Aluminum restarted.
"He offers no credibility to the financial markets or to the metals industry itself," he said.
Prescott called Longview Aluminum an unusual bankruptcy case, because the key creditors, including the Bonneville Power Administration, the Pension Benefit Guaranty Corp., former owner Alcoa and the workers all had interests which may be better served by taking a chance on trying to keep the smelter operating than liquidating it.
For example, the federal Pension Benefit Guaranty Corp. is seeking a claim based on money it says Longview Aluminum owes now-defunct McCook Metals. If Longview Aluminum is liquidated, the pension insurance agency will wind up responsible for Longview pensions as well, he said.
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