Integrating the integrateds: massive steel industry consolidation foreseen in U.S. (Scrap Industry News).

As of early December, a number of U.S. steel companies were discussing merging operations with the approval and even encouragement of the federal government.

Various reports state that as many as six of the nation's largest steel companies are exploring the possibility of merging into a single company, with the majority of integrated steel companies combining.

U.S. Steel, Pittsburgh, America's largest integrated steel company, as well as Bethlehem Steel, Bethlehem, Pa., presently in bankruptcy protection, are two companies taking the lead in the merger talks. Also mentioned have been Wheeling-Pittsburgh Steel, Wheeling, W. Va., Weirton Steel Corp., Weirton, W. Va., and National Steel Corp., Mishawaka, Ind.

The combined group of companies is reportedly asking the federal government to assist in picking up the legacy costs for the retired workers at all the companies. These pension and health care costs for retirees are said to be a major overhead cost that have hurt the integrated mills in trying to compete with both foreign steelmakers and domestic mini-mills. The group may also make a bid for the assets of LTV Corp., Cleveland, which has mills in that city as well as in East Chicago, Ind., and Hennepin, Ill.

Already, the United Steelworkers of America, representing about 140,000 steelworkers, has thrown its full support behind the plan, viewing it as a way to shore up the country's fragmented and failing domestic steel industry.

But some analysts note that any merger deal would likely require major concessions from the union representing steelworkers and substantial government assistance, including both assumption of benefit costs for retirees and protection from foreign steel imports. Steelmakers long have blamed their problems on the "dumping" of steel by manufacturers in Asia and elsewhere.

In Europe, three big steelmakers--France's Usinor, Luxembourg's Arbed and Spain's Aceralia--recently completed a merger.

Combining the top two integrated steel companies alone wouldn't necessarily raise antitrust issues, at least in the U.S., because the industry is so fragmented and the combined company would probably control less than 25% of domestic steel production. That equation could change--and the plan could meet much more resistance from steel users--if more than two integrated companies combined into one.

A consolidation plan, if completed, would likely lead to plant closings and a loss of both management and production jobs as the new company makes moves toward efficiency.

* ADDITIONS TO THE OCTOBER WIRE CHOPPING LIST

When Recycling Today published its list of wire choppers operating in North America, we asked to hear from those who have been left off, and two companies have contacted us. Their wire chopping locations follow:

* Carolinas Recycling Group, Spartanburg, S.C.

* Versatile Processing Inc., Indianapolis, Ind.