NEW YORK Ford Motor Co. and General Motors Co. have opted out of a multimillion-dollar legal settlement over claims that U.S. steelmakers unfairly fixed steel prices, although it is unclear why the automakers have denied themselves some initial compensation.
Eight major U.S. steelmakers were named in a 2008 federal antitrust lawsuit, which alleged that the steelmakers conspired to reduce production and fix steel prices. So far, five companies have settled for a collective $163.9 million: Luxembourg-based-based ArcelorMittal SA, Pittsburgh-based U.S. Steel Corp., Tampa, Fla.-based Gerdau Ameristeel Corp., Irving, Texas-based Commercial Metals Co. (CMC) and West Chester, Ohio-based AK Steel Corp. (amm.com, July 9).
Even so, Dearborn, Mich.-based Ford and Detroit-based General Motors specifically requested exclusion from the settlement and thereby denied themselves compensation from the settlement fund, court records show.
Parties which exclude themselves from the settlement forgo any benefits from the settlement, including their share of financial restitution, but retain the right to sue the settling companies over similar legal claims, according to documents filed in U.S. District Court in Illinois.
That means Ford and GM retain the right to sue the eight steelmakerswhich represent the bulk of U.S. steel productionover similar antitrust and price-fixing claims in the future, if they so wish. Ford and GM buy significant amounts of steel for use in autos.
Neither of the two automakers would reveal why they had chosen to exclude themselves from the settlement.
"Ford is currently reviewing the case. We have no further comment at this time," a Ford spokeswoman told AMM via e-mail.
"We did opt out of the suit, and as such are not part of the suit. This was the settlement of a class action that GM was not involved with," a GM spokeswoman said via e-mail. "GM does not disclose purchasing details on commodities."
Ford and GM excluded themselves from one part of the settlementnegotiated jointly by Gerdau, CMC and AK Steel, and worth $15.9 million. It is unclear if the two automakers will exclude themselves from the portions relevant to ArcelorMittal and U.S. Steel, which each settled at a significantly higher figure than the former three companies.
Better Block Co. Inc., Birmingham Rail & Locomotive Co. Inc., Northern Steel Inc. and Taylor Steel Inc. also excluded themselves from the settlement, according to the filing.
Birmingham Rail president Monroe Jones told AMM his company opted out of the settlement because the Birmingham, Ala.-based rail business is "not a litigious company. We do not choose to sue or alienate our suppliers."
Birmingham Rail buys about 30,000 tons of steel per year, and does not plan to sue the named steelmakers in the future, Jones said.
Modesto, Calif.-based rebar fabricator Northern Steel does not need the settlement money, company manager Michael Jackson said, adding that he has followed the lawsuit and settlement at a distance.
Springfield, Tenn.-based Better Block and Stoney Creek, Ontario-based Taylor Steel did not return requests for comment.
A court hearing for approval of elements of the settlement is set for October. Charlotte, N.C.-based Nucor Corp., Fort Wayne, Ind.-based Steel Dynamics Inc. and Lisle, Ill.-based SSAB Americas have not settled in the case and could still fight the claims. The settling companies have agreed to cooperate in prosecuting the remaining defendants should the case go to trial (amm.com, May 23).