November 22, 2008

Esmark and USW arbitration set for Wednesday

The United Steelworkers and Esmark plan to head into a grievance procedure Wednesday regarding the union’s belief that the steel company violated its Wheeling Pittsburgh Steel Corp contract.

Esmark said in a filing with the Securities and Exchange Commission that the arbitration is to take place Wednesday with a decision to come no later than Saturday.

USW said that Esmark entered into agreements with Essar Steel Holdings Inc. without allowing the USW time provided in the contract to mount a competing bid.

Esmark, meanwhile, has filed an unfair labor practices charge against the USW, alleging the union is interfering in the company’s attempt to be sold to Essar. Esmark contends no transaction between itself and Essar may commence until Monday. The union position is that Esmark entered into its memorandum of understanding with Essar and accepted USD 110 million in loans before the Steelworkers were able to mount a counter-proposal. The Steelworkers invited Russia’s OAO Severstal to consider a purchase of Esmark beginning in January.

Prior filings with the SEC by Severstal detailed that negotiations were progressing until the Esmark-Essar deal was announced April 30.