I came across an interesting article on the Indy Star about the troubled steelmaker Wheeling-Pittsburgh Steel Corporation. It makes interesting reading on how quickly a re-vamped board can re-act to a negative situation. It appears much is yet to be done, following what was a "hostile" takeover. Anyway it makes interesting reading.
Everyone knew Wheeling-Pittsburgh Steel Corp. was in trouble as it sat in the middle of a takeover battle last fall, deeply in debt and dangerously low on cash and credit.
But only after winning the proxy fight and seizing control in December did the brothers behind Illinois-based Esmark find out how bad things really were at the steel company -- and how hard a turnaround would be.
The order book for the first quarter of 2007 was virtually nonexistent, a mere 10,000 tons of steel requested from a company that ordinarily ships more than a half-million tons per quarter. And the crown jewel, an electric furnace worth more than $115 million, was too expensive to run.
That, said Esmark President Craig Bouchard, was "a monumental surprise."
There were more. Steel prices dropped by $100 a ton. Contracts for raw materials and repairs to coke ovens were set to drain away much of the remaining cash and had to be renegotiated.
"We came into a hornets' nest," said Esmark CEO James Bouchard.
Two months later, the Bouchards stop short of promising a profit, but they say second-quarter performance will be good, after the expected fourth- and first-quarter losses. More than 400,000 tons of orders were secured in less than six weeks, and Wheeling-Pitt is scrambling to find new customers and realign old relationships.