Essex plant shutdown confirmed by Avesta July or August closing of stainless steel shop will eliminate 74 jobs

Manufacturing

June 24, 1998|By Sean Somerville | Sean Somerville,SUN STAFF

Avesta Sheffield East Inc. made official yesterday what it had said was likely: the mothballing of its Essex plant and the elimination of 74 jobs.

The company, a subsidiary of Sweden's Avesta Sheffield AB, said high imports and tough competition forced the closing of its stainless steel melt shop, the main operation at the former Eastern Steel Co. plant.

The announcement came a month after the company said it would close its steel coil plate line, eliminating 27 jobs.

Together, the two moves will eliminate all but about 15 of the plant's 115 jobs.

"Current market conditions necessitate this decision," Mike Rinker, president of Avesta Sheffield North American Division, said in a statement. He added that the plant was underused and costly.

The plant probably will be closed late next month or in early August, eliminating jobs that pay $14 to $17 an hour.

"I'm very disappointed that we're going to be losing a lot of business here and that the union folks will not be working, or they'll be working for less," said Bill Harriday, staff representative for United Steelworkers Local 9116-20.

The closing will boost business at Avesta Sheffield's plant in New Castle, Ind., the company said without providing details. Avesta Sheffield employs about 600 at plants in New Castle; Richburg, S.C.; and Wildwood, Fla.

The Baltimore County plant has lost money in every quarter since Avesta Sheffield bought Eastern Stainless from Armco Inc. in 1995, company officials said.

As it struggled, Avesta Sheffield became involved in a dispute with Maryland officials over whether the company had reneged on a promise to deliver 350 jobs in exchange for a state grant of $1.1 million.

The company, which had repaid a separate $350,000 state loan, said the 350-job target was a goal, not a promise.

The company and the state Department of Business and Economic Development are attempting to negotiate a settlement, state officials said.

Once an independent company, Eastern Stainless has been losing money since the mid-1980s. After filing for bankruptcy protection in 1986, it was bought by Cyclops Industries Inc., which was acquired by Armco in 1992.

Eastern Stainless' work force declined from 1,500 in the early 1980s to fewer than 300 in the early 1990s.

To assure Avesta Sheffield's $27.1 million purchase from Armco Inc., workers agreed in 1995 to a four-year contract that cut vacation time, weakened seniority rights and reduced guaranteed work hours.

Still, Harriday said, "they were making a decent wage."

Pub Date: 6/24/98

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