Sen. Edward M. Kennedy (D-Mass) yesterday asked the Federal Trade Commission to investigate the planned merger of LTV Corp. and Lykes Corp.
The proposed merger already won the blessing of the Justice Department in June despite a recommendation from its Antitrust Division that the merger be rejected.
If consummated, the merger would combine the nation's seventh and eighth largest steel makers; LTV is the parent of Jones & Laughlin Steel Corp. and Lykes owns Youngstown Sheet and Tube Co.
Noting in a four-page letter to FTC Chairman Michael Pertschuk that the FTC and Justice share antitrust enforcement, Kennedy, chairman of the Senate Antitrust & Monopoly Subcommittee, complained that the proposed merger would lessen competition in the steel industry and questioned Lykes' assertions that the merger is necessary because Lykes' Youngstown Steel is a "failing company." Kennedy is expected to become chairman of the Senate Judiciary Committee next year.
He said he was concerned about the impact Justices decision to approve the merger might have both on the Youngstown community and on the future efficacy of the antitrust laws.
"I believe that certain questions regarding the merits of the decision may warrant the FTC's consideration of initiating its own investigation," Kennedy said.
Even if Lykes somehow could be considered a failing company, Kennedy said he was unconvinced that this particular merger was "the only available alternative." He suggested that the FTC could find out what alternatives were examined by Lykes or could find a suitable alternative on its own.
"If no alternatives are visable, it would seem to me that serious consideration could be given to attaching conditions to the approval which would lessen the impact of this merger on the community, lessen its impact upon competition, and perhaps even improve the unemployment in the Youngstown area," Kennedy said.
In his letter, Kennedy noted that each of the Antitrust Division staff involved in its investigation believed that for at least 12 different product areas, the merger would result in concentration significantly above that allowed in the Department's own merger guidelines. "Clearly, antitrust, policy should be to restrain, not to foster, such increase in an already highly concentrated industry," he said.
Alfred F. Dougherty Jr., Director of the FTC's Bureau of Competition, said yesterday Pertschuk has asked him to review the letter to try to make a decision on whether an investigation should be started. HIs timetable: "as soon as possible," he said.