Geneva Steel files for bankruptcy, but keeps operating

By Staff -- Purchasing, 3/11/1999

Low-priced steel imports are being blamed for several bankruptcies and big financial losses among domestic steelmakers. Geneva Steel of Vineyard, Utah, is the latest to file for relief from creditors under Chapter 11 of the bankruptcy code, citing "a dramatic surge in steel imports" that began to impact earnings last summer.

Geneva cited "a lack of sufficient liquidity" to make a $9-million bond payment due in January. However, the producer of carbon steel hot-rolled sheet, plate, and pipe plans to continue operating while it reorganizes, according to CEO Joseph Cannon. The firm ships about two million tons annually. "Filing for Chapter 11 protection now eliminates months of uncertainty for all involved and allows us to continue to produce and ship steel without interruption to our customers," Cannon says.

Geneva is the third U.S. steelmaker to seek Chapter 11 protection since last September. Acme Metals of Riverdale, Ill., and Laclede Steel of St. Louis, Mo., also have filed similar Chapter 11 petitions. Gulf States Steel of Gadsden, Ala., according to CEO Robert Schaal, also is considering a Chapter 11 filing as a possibility for dealing with financial woes resulting from high U.S. steel imports.

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