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Severstal to fire up Warren steel mill



Published: Tue, January 26, 2010 @ 12:01 a.m.

The mill’s cold-rolling mill and coating lines will remain idle for now.

WARREN — Severstal is restarting part of its Warren steel mill in mid-March but isn’t saying how many of its 1,150 laid-off workers will be recalled.

“This is fantastic news,” said Warren Mayor Michael O’Brien.

Although only the blast furnace and hot-rolling mill operations are being restarted, O’Brien said the moves show that the mill has a future. It shows that people who expressed a “gloom and doom” attitude during the mill’s long idling were wrong, he said.

“Not for a second have I lost faith that Warren’s best days are ahead,” the mayor said.

Sergei Kuznetsov, chief executive of Severstal North America, said in an interview that the company needs steel from Warren to meet demand from its customers. Orders have picked up from a variety of customers, including pipe and tube makers and those in the construction, automotive and agricultural markets.

The mill will produce steel bands that will be shipped to a Severstal mill in Yorkville, Ohio, for more processing and then to a plant in Martin’s Ferry, Ohio, for galvanizing.

He said Yorkville’s cold-rolling mill is more modern and more efficient than Warren’s cold-rolling mill, so the local cold-rolling operation will remain idle. The company would need a further increase in orders to restart the Warren cold-rolling mill, he said.

The number of workers to be recalled is being discussed with the United Steelworkers of America.

Ed Machingo, president of Steelworkers Local 1375 in Warren, said at a press conference Monday that some maintenance workers received notices earlier Monday calling them back to work next week, but he said he’s not in a position to discuss how many, when other workers are likely to return to work or whether the entire membership of 1,050 will be going back.

Maintenance workers are needed first to get the mill back in working order, then the blast-furnace workers and others, Machingo said.

“The news is very encouraging,” Gary Steinbeck, a director of the steel workers union, said at the press conference, adding that the layoff has been hard on Local 1375 members, some of whom have been off work 15 months.

Steinbeck credited President Barack Obama for helping to stimulate the economy so that the demand for steel has picked up. He said positive developments at the General Motors Lordstown plant and “green manufacturing” are also reasons Severstal is ready to restart.

He added that the social programs that have helped Severstal workers and millions of other workers across the nation are the only thing that has kept the current recession from being a depression.

“That’s all that got us through this,” he said.

Most members of the union received health care throughout the layoff. They also received supplemental unemployment benefits of 60 percent to 80 percent of their pay depending on length of service. Some also received unemployment compensation and had begun to attend meetings regarding the federal Trade Adjustment Assistance program available to them.

The union has been working on month-to-month extensions of its labor contract, which expired Nov. 1, 2008.

Kuznetsov said the two sides are making “very good progress” and said he was “very confident” an agreement would be reached.

Machingo said the work done at the mill, especially on the blast furnace in October 2008, just prior to the shutdown, should bode well for a speedy restart.

In 2008, the mill had 1,050 hourly workers and more than 100 salaried workers. But the collapse of the nation’s economy and credit markets kept the blast furnace idled after October 2008, and other parts of the mill were shut down in early 2009.

Since then, Severstal said it planned to reopen the mill when it had enough orders.

Bette Kovach, a company spokeswoman, said the Warren mill remains a key part of the company because of its ability to make custom blends of steel to match metallurgical qualities of the customer. The mill can produce 185 different blends of chemical elements, she said.

“That makes it very popular with our customers,” she said.

Severstal, which is based in Russia, acquired the mill in 2008 as part its expansion in North America. The mill used to be known as WCI Steel.

O’Brien said Severstal was Warren’s largest water customer in 2008, buying $1.8 million gallons. Its employees also paid $400,000 to $500,000 in income taxes to the city in 2008, he said.

Just before the mill began its layoff, the city had begun to eliminate about 40 jobs, including 20 in police department and 11 in the fire department effective Jan. 1, 2009.

City employees took concessions during the summer of 2009 to prevent further layoffs, and workers agreed to contracts for 2010 that cut about $700,000 in costs, much of it through health care concessions and wage freezes.

Staffing reductions in police and fire departments have led to the closing of two of the city’s three fire stations and complaints about safety-force staffing levels.

O’Brien said he hopes that improved income-tax collections will allow for increased numbers in the safety forces.

“Obviously, safety forces have always been a priority and will continue to be,” O’Brien said, adding that 96 percent of the current income taxes go directly to pay for safety forces.

shilling@vindy.com

runyan@vindy.com


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