U.S. Steel plant's fate unsolved, Slovak prime minister says
The prime minister of Slovakia said a meeting with U.S. Steel Corp. officials in Pittsburgh resolved “several open issues,” but did not lead to a definitive agreement for the steelmaker to keep its plant in the Eastern European country.
Speaking during a brief news conference on Monday at U.S. Steel Tower, Downtown, Robert Fico said Slovak and U.S. Steel officials need more time to work out technical details.
Fico remains optimistic that officials will sign a deal in coming days, perhaps as soon as Wednesday. The reason for his visit was “to motivate U.S. Steel to stay in Slovakia,” he said.
“In the coming hours, experts on both sides must finalize some details,” Fico said in an e-mailed statement distributed by his press department in Bratislava, the Slovak capital. “If this succeeds, we shall be able to announce good news for employees as early as this week, maybe even (Tuesday).”
Company CEO John Surma said he is “grateful for the efforts of the government of Slovakia” to help U.S. Steel “remain competitive in a difficult operating environment.”
Surma said the company and Slovak government held talks for months. He did not take questions from reporters.
Company officials declined to comment on the talks, said to center on tax incentives and energy costs in Slovakia.
In addition to high energy costs and a weak economy in Europe, U.S. Steel said last month that it needs an estimated $400 million to upgrade environmental controls over the next three years at the plant in Kosice, Slovakia's second largest city.
U.S. Steel had hoped to sell the plant, but industry analyst John Tumazos, with Very Independent Research in Holmdel, N.J., said economics don't favor that.
“The way that the world has unfolded in the last two years does not make it easy to sell steel from Kosice,” Tumazos said. “I don't think it's in the power of the Slovak government to make steel prices higher or production costs lower.”
Fico and other Slovak government officials arrived in Pittsburgh on Sunday night to discuss a deal for U.S. Steel to maintain ownership of the plant it purchased in 2000 for $475 million. With 11,000 workers, it is Slovakia's largest private employer.
The Kosice plant can produce 5 million tons annually. It produced 4.4 million tons last year.
It is the last of U.S. Steel's European plants. The company sold its Serbia plant to that country's government for $1 in January 2012.
The Serbian plant accounted for most of the $200 million loss on European operations U.S. Steel recorded in 2011, Tumazos said.
“It appeared when they were running the two plants that Kosice was break-even,” he said. “But conditions seem to be worse than when they walked out of Serbia.”
Alex Nixon is a staff writer for Trib Total Media. He can be reached at 412-320-7928 or email@example.com. The Associated Press and Bloomberg News contributed.
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