Armco, Cyclops study linking two steel plants

March 06, 1992|By Ross Hetrick | Ross Hetrick,Staff Writer

Armco Inc. and Cyclops Industries Inc., two companies that are posed to merge, are studying the possibility of linking Armco's Baltimore operation with that of Cyclops' plant in suburban Pittsburgh.

Such a combination is seen as a way of bolstering the two struggling operations. But executives at the two companies said it was too early to say what form the arrangement would take or how it would affect the Baltimore work force.

A union official in Maryland, however, said linking the two plants could mean fewer jobs at the Baltimore plant in exchange for a healthier operation.

The study involves the Armco subsidiary Baltimore Specialty Steels Corp. and Cyclops' Bridgeville, Pa., operation. Both plants make stainless-steel products, and both have been shrinking the size of their operation in recent years.

Armco, a stainless-steel company based in Parsippany, N.J., agreed in September to purchase Pittsburgh-based Cyclops for $156 million in cash and stock.

Cyclops was set to close down its Bridgeville plant at the end of March, eliminating the jobs of 110 workers. But early this week, the company and the United Steelworkers union reached an interim agreement that might lead to a concessionary labor agreement at that plant and another stainless-steel operation in Titusville, Pa.

Part of the agreement included a study of how the Bridgeville operations could be tied to the Baltimore operation, which has a work force of about 350 and produces stainless-steel rods, wire, bars and billets.

Robert E. Hein, president of Baltimore Specialty Steels, will be coordinating the study, which is scheduled to be completed by April 1.

Such arrangements generally involve one plant's producing semi-finished products and then shipping them to the other plant for finishing work, Mr. Hein said. Both plants now do both processes, he said.

Armco has been trying to sell Baltimore Specialty Steels for 18 months. Mr. Hein does not expect that to change even if the combination is successful, since Armco is intent on leaving the stainless-steel rod and wire business.

David Wilson, district director of the Steelworkers union in Maryland, said the union is negotiating with Baltimore Specialty Steels over the issue of moving work to Bridgeville, which he said would mean fewer jobs in Baltimore.

"The alternative to that is the plant closing down," Mr. Wilso said. "This is the lesser of the two evils."

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