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and the LDS Church
Sent on Mormon-News: 28Jan02
By Kent Larsen
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Geneva Steel Bankrupt Again

VINEYARD, UTAH -- For the second time in just three years Geneva Steel, one of the largest employers in heavily-Mormon Utah County, has sought protection under chapter 11 of the US Bankruptcy laws. The steel producer filed in response to its secured creditors, who required the filing as a condition to further financing of the company. The current agreement with the secured lenders gives the company access to cash through May 1, 2002.

Geneva earlier filed for bankruptcy protection in February 1999, and has had a rocky financial record for many years. It emerged from the February 1999 bankruptcy just one year ago. The company generally blames its troubles on 'dumping' of steel into the U.S. market by foreign producers. The current filing was exacerbated by the economic slowdown in the U.S. since this past summer. The slowdown has decreased demand for the company's products and increased competition among domestic steel producers.

The company laid off 950 employees last November, and on Thursday shut down its coke-making operation permanently, choosing to purchase coke to fire its blast furnaces instead. That move meant layoffs for 36 employees immediately.

At least some of Geneva's hopes for financial recovery are pinned to changes in government policy. Local 2701 of the United Steelworkers of America spokesman Kelly Hansen says the 'dumping' started some time ago, "Since 1997 at least, the market has been flooded with cheap, imported steel and domestic steel makers like Geneva have really suffered," he said. The Bush Administration is currently considering whether or not to impose tariffs and quotas on imported steel in response to recommendations of the International Trade Commission, and has until March 4th to make its decision.

But Geneva's gain may be a loss elsewhere in the country. A study by the Consuming Industries Trade Action Coalition indicates that the proposed tariffs and quotas would cost consumers between $1.9 billion and $4 billion a year and cost 74,500 jobs nationwide because it would raise the cost of steel to the firms that purchase it in the U.S.

But Geneva also hopes to recover based on an improving market for steel. It expects the market to recover in 2002 and points to price increases by several domestic steel producers as evidence. Geneva Chairman and LDS Church member Joseph Cannon said, "We are continuing to pursue alternatives for securing the future of the Geneva mill. This filing gives us the ability to continue those efforts with the cooperation of our secured lenders."


Geneva Steel LLC Commences Chapter 11 Bankruptcy Proceeding
PRNewswire 25Jan02 B4

Geneva to Stop Coke-Making Operations
Salt Lake Tribune 25Jan02 B4
By Bob Mims and Steven Oberbeck: Salt Lake Tribune


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