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THE VINDICATOR, YOUNGSTOWN



Published: Sun, July 15, 2001 @ 12:00 a.m.



THE VINDICATOR, YOUNGSTOWN

By CYNTHIA VINARSKY

VINDICATOR BUSINESS WRITER

WARREN -- Delmar Figinsky's small trucking company is miles away from CSC Ltd., but his business was hit hard when the troubled steel mill shut its doors three months ago.

"It almost put me out of business," the owner of First Choice Trucking and Repair in North Jackson recalled.

"I had to put my house in hock. I had to borrow money from family. I've been in the trucking business for 30 years, but it got so bad, I seriously thought about quitting."

First Choice shipped steel for CSC and relied on the giant special steel bar producer for 50 percent of its business. CSC typically paid the company $15,000 to $18,000 a week -- big money for a company with just 20 trucks and 24 employees.

When the steel company filed for Chapter 11 bankruptcy protection in January it owed the steel hauler $97,000.

"That might not seem like much to some people, but it's a lot of money for a small company like mine. It really put us deep in the hole," Figinsky said.

Aftershock: Large and small businesses across the Warren area felt the shock waves when CSC closed April 13, idling more than 1,300 hourly and salaried employees.

Some hope remains that a buyer will step forward to operate all or part of the plant, but the prospect seemed less likely this week when CSC's attorneys were forced to cancel an auction of the plant. Auction rules required that qualified bidders submit a $1 million deposit, along with other stipulations, and no deposits were received.

Attorneys for CSC and its lenders have said dismantling and selling the plant piece by piece is the next likely step, unless a buyer emerges quickly.

For Mike McAllister, owner of the nearby Champion Subway restaurant, the mill closing has reduced his lunch and dinner crowds enough to cause a profit slump. A few blocks west of the plant on Mahoning Avenue, the sandwich shop and other eateries nearby were frequent meal stops for the mill's hundreds of workers.

McAllister said an aggressive advertising campaign conducted by Subway's national headquarters helped boost his profits 30 percent in 1999 and 2000, and before that he saw average increases of between 5 percent and 7 percent annually. This year, with CSC closed, his profits are stagnant.

"We've had to tighten our belts some, and we miss the business from CSC, but we're making it," McAllister said.

Hit hard: Champion Chicken and Pizza, in business on State Road West for 30 years, was hit with a double whammy this spring -- the CSC shutdown and the opening of several new restaurant competitors in the area.

Owner Nino Cesta said he's seen a drop in business of between 10 percent and 15 percent, and he believes both factors have contributed. Until recently, he explained, his was one of only about three restaurants in Champion Township.

"We used to have a few lunch orders for CSC employees -- 50 or 75 pieces of chicken with mostaccioli. It was nice," he said. "Obviously the closing hasn't been a positive, and if it goes away for good I see it as a real problem for the area."

Cesta said he worries more about the loss of tax support than about his restaurant's survival.

Jaro Transportation, a trucking company based in Warren Commerce Park, managed to minimize its exposure by moving away from CSC in the months before it filed for bankruptcy, said Jim Stiffy, company president.

Stiffy said the mill, formerly called Copperweld Steel, was one of Jaro's biggest customers in the 1980s and early 1990s. When Copperweld filed for Chapter 11 in 1993, Jaro lost about $28,000 and a large chunk of its business.

Copperweld was eventually bought out of bankruptcy by the Reserve Group, an investment firm based in Akron, and officials from the newly organized CSC wanted to continue using Jaro as a shipper. The company provided some services, Stiffy said, but it never again relied on CSC for a major part of its sales.

"We'd already been through one bankruptcy with them, so after that we tried to minimize our exposure," he said. "The closing hasn't really affected us a lot. We might have lost a couple thousand dollars when CSC closed. We shifted most of our service lanes to lanes that didn't include CSC."

Jaro managers are more concerned about the losses they could incur if LTV Steel and Wheeling-Pittsburgh Steel cut back. Both companies also are in Chapter 11. "Without those customers, we'd have a lot to talk about," Stiffy said.

Shafer Industrial Services Inc. on North Leavitt Road in Champion Township also had been through the Copperweld bankruptcy, but when CSC started up owner Nancy Shafer chose to continue providing its industrial equipment cleaning services at the same level.

"We tried to do what we could to keep them up and running," Shafer said. "CSC was obviously a significant customer for us, but we have a pretty broad customer base so we're doing OK. We're going forward."

She said the company lost money in the bankruptcy but wouldn't say how much. "The big picture isn't what's happened to individual businesses but the impact on the community as a whole. It's incredibly sad," she said. "I'm hoping someone will come in, make a commitment and get people back to work there again."

Cheryl Stevens, president of the Warren Area Board of Realtors, said the real estate market has been slow in the Warren area, but she thinks the slump is caused by concern about the economy, not by the CSC closing. "We haven't seen a big influx of CSC workers selling their homes," she said.

New home construction remains strong in Trumbull County, as it is all over the Mahoning Valley, she said.

The Chicago-based Center for Labor & amp; Community Research predicted in March that as many as 2,000 spinoff jobs could be lost because of the CSC closing and that local, state and federal governments could lose a total of $32 million in taxes.

The center's findings were part of a social-cost analysis performed to determine the prospects for a successful turnaround of CSC. Its study also projected that CSC workers who earned about $46,000 a year as steel workers before they were furloughed would see their incomes drop about 37 percent the first year, if they succeeded in finding new employment.

Bill Turner, a spokesman for the Warren office of the Ohio Department of Jobs and Family Services, said hundreds of former CSC workers have been served there so far this year. Staff members also have noticed an increase in the number of furloughed workers from other plants, but they can't say how many might be related to the CSC shutdown.

Turner said many former CSC employees have either started training for new positions, have found new jobs, or are still evaluating their prospects. More than a few have acquired commercial driver's licenses and taken jobs in the trucking industry, one segment of the economy that is still growing, Turner said.

"I've seen a good many of the CSC employees picking themselves up by their bootstraps and trying to get back on track," he said. "You have to give them a lot of credit."

vinarsky@vindy.com




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