Layoffs set at steel plant

150 sign up

blast furnace shut down

July 08, 2006|By ALLISON CONNOLLY | ALLISON CONNOLLY,SUN REPORTER

About 150 workers will go on voluntary, temporary layoff tomorrow at the Sparrows Point steel mill even though teams working to fix the giant blast furnace are making progress toward restarting it.

The "L" blast furnace, which makes the molten iron that is mixed with scrap metal to produce steel, has been down since June 30. A power outage on June 23 allowed the furnace - which normally operates at more than 3,000 degrees Fahrenheit - to cool, causing the metal slag on its walls to solidify.

When workers attempted to fire up the furnace after the power returned, the slag damaged the "tuyere," the nozzle that blasts heat into the furnace.

Without a working blast furnace, the Baltimore County plant, which employs about 2,500, cannot make steel.

The president of United Steelworkers Local 9477, which represents production workers at Sparrows Point, said technicians were able to blast heat into the 294.6-foot- tall furnace and melt the slag, which has begun to empty out.

"It's a very good sign," John Cirri said yesterday. "If we can keep the flow going, we'll be back in business."

But even if the furnace is fixed and producing molten iron, it would take another 10 days to begin making steel slabs, said Jim Blankenship, control room operator.

The union was able to head off a mandatory layoff by negotiating with management for voluntary leaves of up to four weeks. Workers had until yesterday morning to sign up and will be chosen by seniority.

Those with at least two years of service at Sparrows Point qualify for state unemployment benefits.

According to documents obtained by The Sun, workers with at least two years' service and less than 10 years would receive 60 percent of their base pay, which ranges from $15.91 an hour to $21.75 an hour and doesn't include bonuses or other benefits. Those with at least 10 years but less than 20 would receive 70 percent; and those with 20 years or more would receive 80 percent.

Workers also had the option of accepting a shorter workweek.

Under the agreement, the company reserves the right to call back workers if the furnace gets running before the month ends. Some parts of the plant, such as its cold-rolling mill, continue to operate using steel from the plant's inventory.

The furnace mishap comes as Sparrows Point's parent company, Netherlands-based Mittal Steel Co. NV, plans a major expansion in India.

Yesterday, chief executive Lakshmi N. Mittal announced he would build a $9 billion plant in the eastern state of Orissa that would produce 12 million tons of steel annually. By comparison, Sparrows Point produces about 3 million tons of steel a year.

India is rich in minerals such as coal and iron ore that are used to make steel. And like China, the country is undergoing an unprecedented building and consumer boom. It would be Mittal's first plant in his native country.

If Mittal's $33 billion merger agreement with Luxembourg-based Arcelor SA is approved by shareholders this month, the combined company would be the world's largest steelmaker by a factor of five, producing more than 110 million tons of steel a year.

Local steelworkers are watching the merger closely, as Mittal might sell Sparrows Point to avoid antitrust issues with U.S. regulators.

To appease regulators, Mittal has promised to sell Canadian steelmaker Dofasco Inc. to German-owned ThyssenKrupp AG if the merger goes through. However, Arcelor, which bought Dofasco this year, still refuses to sell it. Arcelor will have a majority stake in the new company and will have influence in decision-making.

Justice Department officials have said that if Mittal cannot sell Dofasco, it will have to divest an equivalent asset.

Sparrows Point officials have confirmed that representatives of ThyssenKrupp visited the plant in late May and expressed interest.

allison.connolly@baltsun.com

The Associated Press contributed to this article.

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