Steel plant still troubled

April 25, 1991|By Jon Morgan | Jon Morgan,Evening Sun Staff

Despite a slight improvement in its performance during the first three months of the year, Baltimore Specialty Steels Corp. remains troubled and in search of a buyer.

Significant cost-cutting at the Baltimore stainless steel plant helped it break even in the first quarter, after a period of losses, said Raymond E. Hein, president of Baltimore Specialty Steels. Hein is also a vice president of the company's reluctant parent, Armco Inc. of Parsippany, N.J.

But the outlook for the plant, which is suffering through an industry-wide downturn, is still uncertain. Armco put the operation up for sale last year, then suspended the effort when an agreement was reached for Armco to buy Cyclops Industries Inc. of Pittsburgh. That deal fell through in February and Armco put the Baltimore plant back on the block.

"We are not a part of their [Armco's] long-range strategy. We, therefore, are for sale," Hein said. Hein said some potential buyers have shown interest, although nothing is imminent. An Armco spokesman said a group of employees had expressed an interest in buying the operation.

In the meantime, cost-cutting continues, including layoffs and partial plant shutdowns. Employment is now about 775, down from nearly 900 in 1988.

Armco's 1990 report termed Baltimore Specialty Steels' profitability "less-than-satisfactory." It said no final decision had been made "to dispose, shut down or rationalize" the facility.

Anthony Pulaski, president of Local 3185 of the United Steelworkers of America, which represents some workers at the plant, said employees are anxious about the plant's future but have faced closure threats before.

"I can't see any good coming out of what's going on here," Pulaski said. "There's nothing to do but hang on."

Armco yesterday reported a first-quarter loss of $39.6 million, largely a result of losses from a joint venture.

Armco's loss equaled 47 cents a share, compared with a profit of $12.9 million, or 12 cents a share, during the same quarter a year earlier. First quarter sales of $410.5 million were down about 8 percent from $445.9 million last year.

The quarter's results include a loss of $31.6 million from Armco's investment in Armco Steel Co., a joint venture with Japan's Kawasaki Steel Co. The venture produced an equity loss of $2.1 million in the first quarter of last year.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.