Threads came out with oil plug

[Kiwi_ME]

Frankly, I would hope you would recognize the difference between a steel and aluminum pan if you are about to take a welder to it!

Personally, I would first buy a new plug (in case it's stretched) and "chase" the pan threads with the correct tap. Despite your comments to the contrary, I suspect most likely it is cross-threaded and may be salvageable.

 

[mechtech2]

Welded steel is HARD. Good luck drilling a straight hole and tapping it, much less getting it 90 deg to the perfect gasket sealing area.
Frustration City!
Try the oversized one - it is worth a few bucks.

 

[Maritime Storm]

VW's & the newer Toyotas are real bad for this, seen several in the shop. Get what's called a Piggyback oversize drain plug. What it is, it's a drain plug inside a threaded hollow bolt, the hollow bolt threads into the pan and has a drain plug that screws into the center of it. Each oil change you remove the center drain plug and leave the hollow bolt alone, thus not damaging the newly tapped threads in the aluminium pan.