YOUNGSTOWN WCI to idle sinter company plant
The plant closing will cost the city of Youngstown about $120,000 a year in income taxes.
By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
YOUNGSTOWN -- The city is losing another employer, and 58 Steelworkers will be left jobless with the closing July 15 of Youngstown Sinter Co. on Division Street.
WCI Steel in Warren, which has been operating the plant as a wholly owned subsidiary since 1991, is idling the facility to cut costs. Employees were notified Monday morning.
Tim Roberts, WCI spokesman, said the plant will not be sold, and it may be reopened if market conditions change.
WCI expects the shutdown to save the company $2.3 million a year.
The plant takes steel mill waste, such as slag and ash, mixes it with other materials and heats the mix to form sinter, a porous material used to feed WCI's blast furnace.
At one time sinter was about $7 a ton cheaper than iron ore pellets, Roberts explained, so its use reduced production costs. Now sinter is $2 a ton more costly than iron ore, so it no longer pays for WCI to use it.
Employees: The 58 salaried and hourly Sinter Co. workers will receive health benefits for at least six months after the closing, and Roberts said WCI is reviewing employment opportunities with hopes of employing some of the workers at the steelmaker's Warren mill.
Two issues must be resolved first, however. Roberts said the company will have to negotiate the employment arrangements with Local 1375 of the United Steelworkers of America, which represents WCI workers.
Secondly, production is down at WCI, due largely to the impact of a national steel import crisis. Any employment of Sinter workers at the steel plant would have to wait until production there returns to normal levels, which the company expects to occur later this year, Roberts said.
"We'll try our best to have as many Sinter workers as possible moved to our Warren plant," Roberts said. "That's our desire."
Effect on city: The Sinter plant closing will cost Youngstown about $120,000 a year in income taxes if all 58 employees lose their jobs, said Dan Brott, tax commissioner. The city stands to regain a fraction of that if some workers get new jobs at WCI, he said, because Warren's 1.5 percent tax rate is lower than Youngstown's 2.25 percent rate.
For Youngstown, the loss follows several other business relocations and closings, including the recent shutdown of Tartan Textiles, Merrill Lynch's move out of downtown, and the announcement last week that the Northeast Ohio Correctional Center is set to close.
Roberts said plans are to operate the Sinter plant through July 15. Workers will then begin a two-week shutdown to preserve the plant equipment for future use.
WCI will take a $3.9 million charge against its second fiscal quarter, which ended Monday, to reflect the plant idling costs. About $3 million of the charge reflects the decreased value of the company's assets resulting from idling the sinter plant, he said, and the remaining $900,000 is to cover the cost of the shutdown.
Youngstown Sinter was formed by U.S. Steel in 1957 and closed in 1985 by its then-owner, LTV Steel. WCI bought it for $1 in 1989 when it also acquired LTV's Warren Works.