With the approval of new concessionary union contracts, Armco Inc. said yesterday that it will combine the operations of its Baltimore stainless-steel plant with a mill in Bridgeville, Pa., to create a division called Armco Stainless & Alloy Products.
Under the plan, effective Monday, raw stainless steel will be produced at the Bridgeville mill and shipped to the Baltimore plant on East Biddle Street. There it will be finished into ingots, billets, wire, rod, reinforcement bars and other products.
"As stand-alone units, Baltimore and Bridgeville were unprofitable and their survival was in question," said James F. Will, Armco president and chief operating officer. He said the Bridgeville operation was officially shut and that almost half of the Baltimore workers were on layoff.
"Working with the union, we jointly developed a survival plan that not only allows us to reopen Bridgeville, but gives job stability to our remaining work force at Baltimore," Mr. Will said.
Armco had been seeking a buyer for the Baltimore operation, which has operated as a separate subsidiary called Baltimore Specialty Steels Corp. for three years. Besides converting that subsidiary to an operating division, the company has taken the Baltimore operation off the market, said spokesman Lee Bland.
The Baltimore plant's melt shop, which had produced raw stainless steel, is to be closed under the new plan. That will result in some layoffs, but it was not immediately known how many, Armco spokesman Jim Herzog said yesterday.
The closing of the Baltimore melt shop also would result in a one-time charge in the second quarter of as much as $30 million, Armco said.
The Baltimore plant had about 350 workers before the new arrangement. The plant in Bridgeville, outside Pittsburgh, has about 80 workers, but about 100 laid-off workers are expected to be recalled as a result of the new arrangement. "Some of them have already started," Mr. Herzog said.
Workers in Baltimore and Bridgeville ratified a five-year contract Sunday but votes of 158-145 and 119-53, respectively. Workers at an Armco plant in Titusville, Pa., approved a two-year contract by a 295-134 vote.
The Titusville operation is not part of the new division, but its operation will be under the direction of Raymond E. Hein, former president of Baltimore Specialty and now president of the new Armco Stainless & Alloy division.
The Bridgeville and the Titusville plants were part of Cyclops Industries Inc., bought by Armco in April.
The agreement will freeze union wages at Baltimore and Bridgeville until Aug. 1, 1995, or until the new operation shows a profit, whichever comes first. Then, pay will increase 35 cents an hour. Workers now receive an average of $12.47 an hour. The agreement also calls for profit-sharing and gain-sharing plans.