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Hundreds still await layoff fate at RG Steel



Published: Wed, June 6, 2012 @ 12:09 a.m.

Union leader optimistic company will find buyer

By Ed Runyan

runyan@vindy.com

WARREN

So far, 263 of RG Steel’s 1,135 workers have been laid off, with the others to follow later this month.

Friday’s first wave of layoffs was in the blast furnace. The shutdown of the basic-oxygen furnace, continuous caster, hot mill, finishing and shipping areas will follow, said Darryl Parker, president of United Steelworkers Union Local 1375.

The layoffs allow the company to complete its current orders before it goes idle as early as June 18, the company said. The company is calling the shutdown long-term but not permanent.

Local 1375 represents about 1,000 workers. An additional 135 are nonunion.

RG announced last month it was closing its Warren; Sparrows Point, Md.; and Wheeling, W.Va., plants. It filed for bankruptcy protection Thursday and has cited a “liquidity crisis” as the reason for the mill’s woes.

Parker said he’s optimistic that RG Steel will find a buyer who will start the mill back up.

“I’m hopeful there will be a buyer who sees the value of our plant and has the passion and finances to keep steel operating in the Warren area,” said Parker, who became president May 1.

“We know there’s a market for what we make, and we’ve always tended to have a loyal customer base for this plant specifically,” he said.

The mill on Pine Street in Howland and Warren townships makes high-strength, high-carbon steel used primarily in the automotive and construction industries, as well as items such as shovels, wheelbarrows and guardrails, Parker said.

“We have a good work force here,” Parker said. “It’s second to none for what we do and what we produce.”

The problems RG Steel is having are not new. The steel industry tends to experience a lot of fluctuations, Parker said.

Among the current issues are steel prices that have “fluctuated downward and the [higher] cost of raw materials” such as coke, ore, limestone and scrap metal.

It’s common for orders to slacken in the second quarter of the year, as they have this year, Parker said.

RG workers are beginning to apply for unemployment and company-paid supplemental unemployment benefits. The amounts they will receive vary depending on seniority.

The Ohio Department of Job and Family Services has scheduled Rapid Response sessions to assist workers at 10 a.m. and 1 p.m. Tuesday and next Wednesday at the union hall, 684 North Park Avenue.

Meanwhile, Warren Mayor Doug Franklin says the mill’s closing hurts the city and its finances through loss of revenue, but he isn’t expecting the kind of strife the city experienced the last time the mill shut down.

Like 2009, when the mill closed during the Great Recession, the city probably will see a reduction in sales-tax revenue. Workers at the mill pay around $275,000 in annual income taxes to the city.

The city also will see a reduction in water and wastewater revenues. The mill pays about $700,000 annually for water and about $1.5 million annually for wastewater treatment.

But unlike 2009, when the city laid off 20 police officers, 11 firefighters and eight other workers, Franklin said the city will “do our best” to cope with the mill’s shutdown “without cutting services.”

In an emailed statement, Bette Kovach, RG spokeswoman, said RG Steel is no longer taking future orders from customers, and the various divisions of the Warren mill will “wind down as we complete processing current customer orders.

“This process will result in some units operating for several more weeks, and it will take a few more weeks thereafter to ship the product to our customers. The timing of layoffs will vary by department and depend on a number of factors.”


Comments

1southsidedave(4807 comments)posted 2 years, 5 months ago

Yes, this is part of Obama's back-to-work program

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2Attis(908 comments)posted 2 years, 5 months ago

Why doesn't USWA 1375 buy the plant? Or how about Uncle Sam? Why beg for some other private parasite to suck the life blood out of a plant that has been the economic rock of Warren for a century?

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3redeye1(4629 comments)posted 2 years, 5 months ago

Attis Why should the Gov't be made to buy this plant. Maybe the unions are the ones sucking the life out of this plant. I know in your mind its the mgnt. But you better look at what the EPA has done to this industry with their stupid new regs put in by Obama and his gang of fools.

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4georgejeanie(869 comments)posted 2 years, 5 months ago

Ill bet these steel workers would love to have Bain Capital buy this plant. Maybe they would get another few years from a 100 year obsolete plant. But when Bain had to shut it down they would be crying that they were robbed of their lively hood. Get over it, companies are in business to make money, they do not make money they shutdown or go out of business, or sell. These union workers will vote for the messiah again, get their government handouts and vote democratic 2016. As the rest of the country moves forward, The Mahoning Valley will continue to stagnate with the people with a backbone will move out of the area and leave the old and hoodrats to live in their own little world of crime and goverment handouts.

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5VINDYAK(1799 comments)posted 2 years, 5 months ago

Obama has people right where he wants them. He is offering a new world of peace, tranquility and prosperity to all past underprivilaged people simply for their vote. Never mind he has to borrow the money from China to pay for all of this.

Oh, btw, I was working my mulchbeds around my house with a shovel, when the spade shovel blade bent as I dug into some hard soil. I took a close look at the shovel...made in China. I went to the garage and found my good shovel, you know, the one with the yellow handle and the black rubber tip. Unlike our President, who bends to self-imposed leaders, that shovel never bends and ... its made in USA! How much longer will we be able to say that?

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