The company is struggling financially because of the sluggish economy and increased tariffs on the foreign steel it buys.
SEWICKLEY, Pa. -- Cold Metal Products Inc. has abruptly closed its plants in Youngstown and Indianapolis, leaving 184 jobless.
The company said it notified its employees Thursday, and the closings were effective immediately.
"To preserve the rest of the business in these difficult times, we had to make a difficult decision to close these two unprofitable facilities," said Raymond P. Torok, president and chief executive officer.
"We are very saddened by the impact this closing will have on the affected individuals and their families. But we believe this action is necessary to preserve the rest of Cold Metal and is thus in the best interest of our remaining employees, customers, shareholders and suppliers," he added.
The Youngstown plant employed 116 people, and the Indianapolis plant employed 68. Both were operating at low levels of capacity, the company said.
Cold Metal postponed filing its annual financial reports last month, saying it was working with lenders and other funding sources to secure working capital. On Aug. 2 the company announced that the American Stock Exchange had halted trading of its stock because its financial statements still hadn't been filed with the Securities and Exchange Commission.
Company officials have said recently that the company has been struggling financially because of the sluggish economy and has been negatively affected by the Bush administration's foreign steel tariffs because those tariffs have increased the cost of the steel it buys.
The company's performance fluctuated over the years, recording record sales in 1994 and record net sales and income the following year. But it cut 22 local jobs in 1998, when it reported a $1 million loss. The following year, it cut 200 jobs, including 40 in the Mahoning Valley.
In 2000, the year company headquarters moved from Boardman to Sewickley, it reported its biggest annual profit in five years, but last year, it closed a production line at the Youngstown plant. That February, Torok warned that the company was considering closing its Youngstown plant, which, at that time, was the only plant losing money.
In February of this year, Campbell City Council endorsed a 60-percent, nine-year tax abatement for new machinery.
Cold Metal provides steel products for precision parts manufacturers in the automotive, construction, cutting tool, consumer and industrial goods markets. The company operates plants in Ottawa, Ohio; Roseville, Mich.; Hamilton, Ontario; and Montreal, Quebec.
The company, whose history dates to 1928, was acquired by Jones & amp; Laughlin Steel Corp. in 1957 and became J & amp;L's strip steel division. A new Youngstown-headquartered corporation with the name Cold Metal Products was established in 1980 to own and operate Jones and Laughlin's former strip mill plants at 45 S. Montgomery Ave. in Youngstown and in Indianapolis. In 1980, there were 330 workers in the Youngstown plant.
In 1982, members of United Steelworkers Union Local 3047 voted to grant the company contract concessions the company said would help sustain its operations. In 1986, the workers approved a contract with a wage freeze.
The company said it lost $19.8 million or $3.08 per share in fiscal year 2002, which ended March 31, on sales of $161.3 million. That compares with a fiscal 2001 loss of $6.8 million, or $1.05 per share.