Ohio Firm To Buy Armco Unit

August 16, 1994|By Kim Clark | Kim Clark,Sun Staff Writer

Republic Engineered Steels Inc., an employee-owned steelmaker based in Massillon, Ohio, said yesterday that it would buy the long-troubled Baltimore Specialty Steels Corp. plant on East Biddle Street.

Republic declined to say how much it had agreed to pay for the local stainless steel plant, which is owned by Armco Inc. The company also declined to give details on what the purchase would mean for the approximately 40 Baltimore employees.

But Jim Harmon, who represents the United Steelworkers union members at the plant, said he was glad the plant would be sold because of indications that Republic will restore some of the 850 jobs that have been lost at the plant in the past five years.

"I think it is a good idea," Mr. Harmon said. Republic "is going to expand. We hope they will be calling back more people."

Harold V. Kelly, Republic's executive vice president, declined to predict how many people Republic would employ at the Baltimore company.

Republic plans to roll and finish stainless steel rods in Baltimore made from slabs cast at company plants in Ohio. The company said it would sell the corrosion-resistant rods and bars made in Baltimore to toolmakers, automobile plants and equipment makers.

Republic has signed a letter of intent to purchase some of the Baltimore land, buildings and equipment from Armco, but the two sides still have many details to work out, Mr. Kelly said.

Not all the assets of Baltimore Specialty Steels are included in the purchase agreement, but the company would not elaborate. The proposal must be approved by both companies' directors.

The purchase would make Republic, which already owns two other rod-making plants, the nation's second-biggest maker of stainless steel rods, Mr. Kelly said.

It was also unclear yesterday what impact the employee-owned structure of the company would have on workers here. Republic has given ownership shares in the past to employees of acquired companies, Mr. Kelly said.

Although the Baltimore plant has lost tens of millions of dollars since 1980, and has plummeted to only about 40 workers from a high of 900 five years ago, Mr. Kelly said Republic was confident "we can operate the plant efficiently and profitably."

Armco officials did not return telephone messages asking for comment on the sale.

The Steelworkers' Mr. Harmon said that while the Baltimore plant has undergone large layoffs and reorganizations recently, it has recently moved into the black.

Yesterday's announcement came as yet another installment in the changing fortunes of the East Baltimore plant.

After almost shutting the plant because of huge losses in the mid-1980s, Armco laid off several hundred workers and restructured the plant. In 1988, the plant marked its first profitable year in eight years by building back up to almost 900 employees.

But a recession drove the plant back into the red and forced layoffs again. And in 1991, the Parsipanny, N.J.-based steelmaker announced it wanted to sell the Baltimore plant, and negotiated with Republic.

The negotiations fell apart, however. In 1992, Armco pulled its Baltimore plant off the market when it bought Cyclops Inc., which operated another stainless steel plant in Baltimore. Armco said it would operate the two local plants.

About six months ago, Armco quietly restarted negotiations over the Baltimore plant, Mr. Kelly said.

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