By Mike Boyer
The Cincinnati Enquirer

United Steelworkers of America announced a tentative labor agreement Wednesday with United States Steel Corp., giving USX the edge over AK Steel in the bidding for bankrupt National Steel Corp.

Middletown-based AK didn't comment. But the company's $1.13 billion bid for Mishawaka, Ind.-based National is conditioned on reaching a labor agreement with the Steelworkers by today. AK Steel was designated lead bidder in early February after it reached a purchase agreement with National, topping U.S. Steel's earlier $950 million offer.

AK Steel "acknowledged the ball's in their court,'' Leo Gerard, Steelworkers president, said after talking with the company.

He said the union, which resolved a bitter three-year lockout at AK's Mansfield, Ohio, plant late last year, was willing to negotiate with AK Steel.

But he said U.S. Steel entered the negotiations with a new, more cooperative approach. "They knew they would have to change, if they were going to get change from us,'' he said.

Negotiators for the union and U.S. Steel met for a month, including sessions "16 to 20 hours'' long the last 10 days, he said.

By contrast, he said, the negotiations with AK Steel were mainly exchanges of e-mails, phone calls and "answering a number of irrelevant questions.''

AK's shares rose 12 percent Wednesday, closing at $3.89, up 43 cents. Investors anticipated AK's bid would not succeed, relieving financial pressure on the company. If successful, the deal would have doubled AK's size.

However, AK officials said previously that they would be interested in acquiring other steel assets if they were unsuccessful in acquiring National.

The auction of National's assets, including its mills in Michigan, Indiana and Illinois, is set for April 16 with a court confirmation hearing April 21.

The tentative agreement between U.S. Steel and the union, which both sides described as "historic,'' is conditioned on approval by the bankruptcy court and ratification by union members.

"This is an important agreement on the way to a humane consolidation'' of the industry, Gerard said.

The agreement, which would run until September 2008, covers about 20,000 workers at both National Steel and U.S. Steel and about 100,000 retirees.

Neither the union nor U.S. Steel would disclose details until it is presented to union members.

But officials said it was similar to the agreement reached earlier between the union and International Steel Group, the new Cleveland company that acquired LTV Corp.

It includes reduced management staffing, more worker voice in operations and training, changes in job classifications and "ground-breaking profit-sharing and the highest wages in the industry,'' Gerard said.

U.S. Steel said the agreement would eliminate 5,700 jobs, or 20 percent of the combined workforces.

U.S. Steel also said it will record "significant accounting charges'' for pensions and other post-retirement benefits in the agreement.

U.S. Steel's shares closed Wednesday at $11.68, up 48 cents.

E-mail mboyer@enquirer.com