Wednesday, June 6, 2012
By Ed Runyan
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.”