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V&M delivers plant, 350 jobs



Published: Tue, February 16, 2010 @ 12:00 a.m.

Valley leaders hail $650M project as largest in decades

By DON SHILLING

VINDICATOR BUSINESS EDITOR

  VM Star Expands

VM Star Steel announced a $650 million expansion in the Mahoning Valley during a Feb 15, 2010 news conference in Younstown, OH.

VM Star Steel announced a $650 million expansion in the Mahoning Valley during a Feb 15, 2010 news conference in Younstown, OH.

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HAPPY MAYORS: While negotiations over V&M Star Steel’s $650 million expansion at times were tense, Youngstown Mayor Jay Williams, left, and Girard Mayor James Melfi were all smiles Monday when the company announced the project will be built here.

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NEW FACILITY: Construction on V&M Star Steel’s $650 million expansion will start next month, company officials said. The blue section of the drawing is the addition location.

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ALREADY OPERATING: This is the site of V&M Star Steel’s current mill on Martin Luther King Jr. Boulevard in Youngstown. The mill also is near the city of Girard.

YOUNGSTOWN — V&M Star Steel said construction will start next month on a $650 million pipe mill that will employ 350 people.

It will be the biggest industrial plant to be built in the Mahoning Valley since the General Motors assembly plant went up in Lordstown in the 1960s, said Walter Good of the Youngstown/Warren Regional Chamber.

“We haven’t seen anything like this in decades,” said Good, who oversees economic development for the chamber.

And V&M may have more in store.

Roger Lindgren, company president, said Monday that construction of a melt shop still is under consideration.

The melt shop, where a furnace heats scrap steel as part of the steelmaking process, had been part of the long-discussed project but has been put on hold. Lindgren declined to discuss why V&M isn’t going forward with that part of the project or what would be needed for it to happen.

As with the pipe mill, the decision rests with Vallourec, a French pipe maker that is the parent company of V&M. Vallourec has several pipe and drilling companies scattered throughout North America.

David Bozanich, Youngstown finance director, said he thinks V&M will go forward with the melt shop once the pipe mill is up and running profitably.

“It’s tough to approve both investments in this kind of market,” he said.

Adding a melt shop would cost about $320 million and add more than 100 jobs.

The initial plan for V&M was a $970 million expansion with 400 new jobs.

V&M opted not to build a melt shop here now, which reduced the investment to $650 million and the jobs to 350.

But local political and business officials at Monday’s announcement said they are thrilled that V&M is making such a large investment in the Valley, and look forward to a future investment.

The pipe mill is expected to begin producing toward the end of 2011. Full production is expected to be reached by the end of 2012.

The expansion will go up next to the mill on Martin Luther King Jr. Boulevard, which has about 500 workers who produce pipe mainly for oil and gas exploration.

Lindgren said the hiring of additional maintenance workers and specialized production workers will start in about six months. Regular production workers will be brought on later, and hiring is being done through Ohio’s One-Stop system.

Skip Herald, managing director of V&M’s North American operations, said the company needs the new mill because of an expected jump in demand for drilling pipe needed for natural-gas exploration.

Advanced drilling techniques have opened new natural-gas fields, including the Marcellus Shale, a giant field that is under eastern Ohio, much of Pennsylvania and nearby states.

Lindgren said the new mill will be designed to produce the high-grade, smaller-diameter pipe exploration of the Marcellus Shale requires.

The new mill will be able to produce pipe as narrow as 23‚Ñ8 inches in diameter, compared with 5 inches at the current mill, he said.

Lindgren said V&M chose to expand in Youngstown because of its proximity to the Marcellus Shale, its work force and strong local partnerships.

Local officials said the project will draw other manufacturers to the area.

Good said chamber officials are trying to recruit other companies in the drilling industry to locate plants in the area as they prepare for projects in the Marcellus Shale.

V&M also will need more suppliers as it expands its production, he said.

Bozanich said he expects other pipe operations to open in the area. These companies would buy pipe from V&M and perform finishing operations to prepare it for other uses, he said.

Bozanich noted the city already has announced plans to tear down the former Youngstown Sheet & Tube Co. headquarters in the area and will be seeking funds to tear down abandoned houses.

Now that V&M has committed to its project, more governmental funding sources will open up to redevelop the area, he said.

“The dynamics of that area are going to change,” he said.

shilling@vindy.com

SEE ALSO:Williams, Melfi: Success shows value of regional cooperation.


Here are key points that led to the announcement by V&M Star Steel that it is building a major expansion project in Youngstown.

September 2008: V&M and Ohio Environmental Protection Agency officials begin discussions on an expansion project near the company’s location on Martin Luther King Jr. Boulevard in Youngstown, near the Girard line.

December 2008: Youngstown signs purchase option deals with three companies to provide about 125 acres worth of land for V&M’s proposed expansion project. V&M agrees to reimburse the city for the purchases, which cost about $5 million.

February 2009: The project hits a snag as the company struggles to sign a deal with Norfolk Southern to relocate a railroad line that runs through the site of the planned expansion.

March 2009: V&M delays its decision on the expansion project till early 2010. The company had expected to decide by September 2009. Facing financial struggles, V&M laid off about 50 local workers and cut the hours of most of its other employees. Also, the Public Utilities Commission of Ohio approves discount electric rates for the V&M proposed site and allows FirstEnergy Corp. to recover money from its other customers.

April 2009: The state announces it would provide close to $20 million from the federal stimulus package to buy the Norfolk Southern property and to make improvements to the land needed by V&M for an expansion. The city comes to a deal two months later for the needed railroad property.

August 2009: Youngstown and Girard officials hit a major snag in negotiating the transfer of property in Girard to Youngstown for the expansion project. V&M insists that all of the land be in Youngstown. The problem is some Girard city officials, most notably Mayor James Melfi, are upset about the amount of land his city will lose. It ended up being about 191 acres. The deal calls for the two cities to split a 2.75-percent income tax to be accessed on all employees at the proposed new facility and a 2.75-percent profit tax on V&M’s expansion plant. A tentative deal between the cities is reached toward the end of the month.

October 2009: Melfi objects to the language in the deal between the two cities and says he won’t rush an agreement that is bad for Girard even though V&M officials wanted a deal done by late August. After further negotiations, a deal is approved in mid-October.

November 2009: Youngstown Mayor Jay Williams meets in Paris with officials of V&M’s parent company, Vallourec Group. The mayor said the meeting went well and says the Mahoning Valley location is the company’s preferred site for an expansion.

December 2009: The U.S. International Trade Commission votes to impose duties on pipes from China used mostly in the oil and gas industries, V&M’s business. V&M and other companies testified that the Chinese government had been subsidizing its pipe industry so it can unfairly dump products in the U.S. market.

February 2010: V&M announces it’s building its expansion facility in Youngstown.

Sources: Vindicator files


Comments

1timOthy(802 comments)posted 4 years, 6 months ago

This is good for some people in the City's of Ytown and Girard ! Now it'll get interesting. First you'll have the Building Trades which some hire out a hiring hall. I'm a Carpenter and we don't have hiring halls so the PAC committee will put their people in there instead of the Most Qualified people.And with Our Building Trade Agreement they can come from any of the 27 counties that signed the contract,so with that being said it's open season for our craft. Unless these Genius Mayor's put a clause in that all workers must come from Trumbull, Ma honing and Columbiana counties ! I don't think there pencils are that Sharp. You'll be dealing with the Trades who built this great country! Get it high Bro's and Sister's.

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2UnionForever(1470 comments)posted 4 years, 6 months ago

Time to unionize V&M. That way the workers will get a much better deal when it comes to wages and benefits. I suspect lots of non-union building tradesmen will be brought into Youngstown for the project. Let the union signing cards begin!!!!

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3Father_oftime(5 comments)posted 4 years, 6 months ago

One of the main reasons the expansion is going here is because V&M is non-union. I bet RMI would have expanded here if it was not for the union.

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4sue(170 comments)posted 4 years, 6 months ago

To the French Company: Merci beaucoup.
To all those involved in bringing this to fruition: Great Job!

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5leaveusalone(103 comments)posted 4 years, 6 months ago

Well done! Now, if we can just keep the unions from making unreasonable demands, we'll be in good shape.

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6Lifes2Short(3875 comments)posted 4 years, 6 months ago

Very nice. Hopefully this can be the start to a new Youngstown.

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7Silence_Dogood(1333 comments)posted 4 years, 6 months ago

To the Mayor of Youngstown, Jay Williams.
THANKS for a job well done !

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8ront(119 comments)posted 4 years, 6 months ago

where is the outrage that tax dollars are going to help a private forgein corporation?

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9Attis(873 comments)posted 4 years, 6 months ago

Merci beaucoup Vallourec!
Dankeschoen Mannesmann!
happy mardi gras, folks!
Is there a celebration today at Kuzmans?
There should be!

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10BillyBob(92 comments)posted 4 years, 6 months ago

We need to support this business being non-union, unions have run too many out of Youngstown in the past.

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11candystriper(575 comments)posted 4 years, 6 months ago

Jay may turn out to be the best Mayor Youngstown has had in 50 years!

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12borylie(790 comments)posted 4 years, 6 months ago

Probably holding off on the melt shop to see whether or not they're going to have to contend with the unions or other external forces.

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13ericp(4 comments)posted 4 years, 6 months ago

So... I don't know about all of you... Great! 350 jobs. How do you apply for one? Where is the website to apply for it? Yeah I searched for obvious places on google and didn't see any employment links. Or is this just some big brother union Bull S**t get together where if you haven't been in the union for X amount of years and it's not what you know buy who you know... I don't see how it can do much good if you can't even apply.

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14cambridge(2996 comments)posted 4 years, 6 months ago

For all of you that are against your neighbors who will work for this company belonging to a union, you should realize that European steel workers for Vallourec Steel belong to the "International Metalworkers Federation".

Since the local community doesn't think Americans are worth the same conditions why would the company?

http://www.imfmetal.org/index.cfm?c=1...

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15cambridge(2996 comments)posted 4 years, 6 months ago

paulb....My post will not be as long as yours but I think it will make more sence. Read it slowly, you might need a couple of times to understand it.

The US sent 25 million to V & M Steel and they sent 650 million back.

I'll take that deal every day of the week from any company from any planet.

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16walter_sobchak(1893 comments)posted 4 years, 6 months ago

When North Star ran this plant, I believe that a worker needed to have a minimum of an associate degree to work for them. Obviously, that company figured that if a worker was smart enough to think for themsleves and get a degree, they would realize that they didn't need to belong to a labor union to work. I don't know if this is still a requirement to work there.

It is still great news for this area. V&M knows what they are getting by expanding here. So, if at some point the workers believe it is in their best interests to organize, let them vote on it. And they should vote on it, not sign some card!

What galls me though, are the politcians. I heard little Timmy Ryan on Y-103 this morning talking about how this project helps with the "green job" movement because the pipe is used in natural gas drilling! I didn't think that natural gas was one of the new green technologies? Last time I checked, natural gas is a fossil fuel (a combustible organic material derived from the remains of former life, like the Democratic party). Timmy ended the talk with the quotation "Drill, baby, drill!" I wonder if Ms. Pelosi heard that if she would be happy. And, if he wants to drill, open up the federal lands for drilling and exploration. What a hypocrite!

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17SemperTyrannis(49 comments)posted 4 years, 6 months ago

Paulb,

The US government has given billions in tax breaks-corporate welfare-to US Corporations who turn around and out-source jobs to other countries. Take these jobs where you can get them.

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18Stan(9923 comments)posted 4 years, 6 months ago

I am hoping that this plant will make high tensile thinwall tubing for my proposed rickshaw and bicycle plant . Now if I can only get a government grant to go into production .

NANCY TESTING GREEN TRANSPORTATION IN DC !

http://i36.tinypic.com/10psy9e.jpg

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19SemperTyrannis(49 comments)posted 4 years, 6 months ago

USA1,

So, is the reason so many corporations have outsourced jobs and expanded overseas-instead of here-because we are corrupt too?

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20Attis(873 comments)posted 4 years, 6 months ago

This is great news for our community and cause for a big celebration, especially on Mardi Gras. Laissez les bon temps rouler! Let the good times roll! Kuzmans anyone? Polka the night away?

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21pit_bull_marley(291 comments)posted 4 years, 6 months ago

Perhaps they outsourced the jobs to the US to get away from their own unions in France

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22SemperTyrannis(49 comments)posted 4 years, 6 months ago

USA1,

What I meant is, if V&M is here because of "corrupt socialism" in France and Germany, is our country corrupt too? After all, we've lost millions of jobs to foreign countries. They must have left for a reason, right?

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23verita(14 comments)posted 4 years, 6 months ago

It's great news for everyone that this project is a go considering that Girard's mayor nearly ruined the deal. Wasn't he quoted as saying he'd never be happy with this deal? Girard's City Council should have been pictured with Mayor Williams because they had the common sense to give this deal a go-ahead and the credit goes to them.

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24AXLE69(181 comments)posted 4 years, 6 months ago

usa1-pro-conservaterican,you are a typical conservative hypocrite,still bashing the unions.This after you reaped the benefits of being in the UAW for almost a quarter of a century.Do you believe GM just gave you those benefits out of the goodness of their little old hearts? Get a new line dude,this is getting stale.How about presenting some facts for once.How exactly do unions promote illegal immigration? And don`t give me some garbage that you heard on Glenn Becks show.And make sure it`s legit because I will be back to prove you wrong.What you should be doing is praising our President Obama.Did you READ in the articles that this wouldn`t have been possible without the stimulus money? There`s a real possibility that V&M will eventually move its world HQ`s here.Also there will be an announcement very soon that GM Lordstown will be adding another shift of 1200 workers.Wow,usa1-pro-conservaterican,they are all union workers too.Gee,it`s strange that GM can do that, since in your whacked out mind the union workers are all lazy,socialists,vandals etc.,well except for you of course.It`s always amusing reading your,shall we say,less than intelligent rants.The best thing that ever happened to the UAW at Lordstown is when you walked out of the door for the final time.By the way,I haven`t seen you bashing your beloved Toyota?Hypocrite on that too.

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25ront(119 comments)posted 4 years, 6 months ago

you know. if i had a companyconsidering moving to the mahoning valley, after reading some of these comments,i would run like hell from the mahoning valley. so many won't back one of the largest employers. knock the workforce that made the mahoning valley such a force in the world.

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26ytown9999(55 comments)posted 4 years, 6 months ago

Pitt_bull_marley said: "Perhaps they outsourced the jobs to the US to get away from their own unions in France"

Best comment on this thread!!!

Chrysler is owned by Germans, and I'm not sure about Ford but my "American" GM truck was built in Canada with parts made in Mexico.

So much for an "American" company at all these days.

Anyone scoffing at 350 $50k (to start) jobs or talking about unionizing is an idiot.

And for those who think $50k is no big deal for the steel industry - try adjusting it to the insanely low cost of living here - it IS a lot of money for this town.

Of course it's chicken feed compared to your garden variety local Gub'ment job, put I digress...

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27timOthy(802 comments)posted 4 years, 6 months ago

Your not going to stop Tradesmen from around the State nor Country from coming to Youngstown and working on this project period. All of our Books are International and we are entitled to work any where in North America unless Ytown isn't part of North America. So your comment on the Radio(570) about locals working is a Joke ! And Western building trades involves all Crafts except Carpenters which is Part of Northeast Council of Carpenters out of Cleveland, Ohio. We sure didn't mind people from Ytown area working in Cleveland on It's projects And there Business agent form 171 Carpenters makes Cleveland Scale not 171 scale. And his boss is in Cleveland out of local #21 .Now we have a Politician Dictating rules and conditions. It's for people of Ma honing,Trumbull,and Columbiana counties ! Mayor did you forget the people of Pa too. They'll boycott your failing city. We'll be watching you Mayor and Youngstown!

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28AXLE69(181 comments)posted 4 years, 6 months ago

usa1-pro-consevaterican,as I expected you didn`t prove your lie that unions promote illegal immigration.Like I commented,it`s easy for you to write your drivel on here but it`s gets hard when someone calls you on it doesn`t it usa1-pro-conservaterican?No one associated with the UAW leadership has ever been accused of Mafia ties.In fact,if you knew your history(which you don`t) you would know that Walter Reuther was shot because he wouldn`t involve the union with the Detroit mob back in the 30`s and 40`s Oh,so now Toyotas problems were caused by poor management? lol.That`s funny because you have had numerous comments on here praising the management of the foreign automakers in the past.I`m not surprised because when you can`t mold the issue to fit your hypocrisy then of course you try to go down another road.Nice try usa1-pro-conservaterican.Back to the drawing board.Still whining about your fantasy of our President being a Kenyan and not really president I see.I love it.Everytime I tell people to go on here and read your comments they just shake their heads after and say "Whew,that dude isn`t playing on a level field" lol.Actually they say much worse but I can`t write that.Unlike you,I can control what I post on here. I imagine that ront was thinking of you when he wrote that if companies thought you were representative of the Mahoning Valley they would never invest here.Have to agree with him on that point.Fortunately you are part of the fringe so we`re in good shape.What,no comment on GM bringing the 3rd shift back? Thank you President Barack Hussein Obama on behalf of usa1-pro-conservaterican for getting the economy slowly but surely back on track.Is this a great country or what? Brought to you by sanity!

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29portcullis777(2 comments)posted 4 years, 6 months ago

As far as unions go; everybody takes a certain side and it's always debated.

However, one point that gets me is when people always speak of union shops and how they protect the lazy. These same people labor under the delusion that this does not happen in nonunion shops.

PLEASE! We all have experienced, heard, or read about nonunion businesses that have lazy employees who kiss ass, laugh hard at any joke the boss tells(whether funny or not), or make gopher runs.

Point is there are lazy employees on both sides.

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30portcullis777(2 comments)posted 4 years, 6 months ago

To ericp: You claim you are interested in a VM Star Steel job but can't (for the life of you) find out how to apply.

Here's a thought: Perhaps look in the phonebook, find out their telephone number, call them, and ask how you can apply to their company. Voila!

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31redvert(2058 comments)posted 4 years, 6 months ago

I do not think we have to worry about the unions interfering with this V&M expansion. They know better than to make noise now. Once the expansion is complete and the union feels they have V&M by the short hairs I would expect things to change.

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32ytowngramma(39 comments)posted 4 years, 6 months ago

portcullis777 - Looking in the phonebook, obtaining the number, and calling them is pointless. I, as well as others, have called and got voice mail, left a message and one week later, still no return call. Now, one could continue to call and leave messages, but what do you think the chances are that you'd get a job after doing such a thing? Your name would be on a "do not hire list. The press conference said they would be hiring within the next 30 days and it would be through OneStop but no jobs posted as of this date. The jobs I am referring to are degreed positions, engineering, etc....nothing posted.

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