Plant's workers express relief, skepticism on new ownership

August 03, 2007|By Meredith Cohn and Hanah Cho | Meredith Cohn and Hanah Cho,Sun reporters

Official word began trickling in by e-mail, fax and cell phone before dawn yesterday to workers on the early shift.

By midday, one way or another, most all of the 2,100 or so hourly workers at the Sparrows Point steel mill had been told the name of the plant's newest owner - the fourth in four years.

The specifics were few, but workers felt relief at knowing - after weeks of not knowing.

Some heard good things about Chicago-based Esmark Inc.

They heard top company executives were "real steel men," that management had good relations with labor, and that Esmark owns a finishing mill that could use the steel slabs made at Sparrows Point. That could assure a long-term customer that would demand more of the product made locally.

"I think we're all optimistic, but until they drive steel pilings into the ground and start expanding the plant, I won't believe," said Roger Ramsey, a maintenance technician, or millwright, and 12-year veteran of Sparrows Point.

"Show me, don't tell me," Ramsey said.

Forgive them for the skepticism, they say. They've been at this point before.

The 118-year-old Baltimore County plant was owned by Bethlehem Steel, which went bankrupt in 2001 and sold the plant in 2003 to Ohio-based International Steel Group.

That was a harsh blow for workers, many of whom could count their service in decades and closely identified with the mighty Bethlehem Steel.

"When it happened the first time, there was a tremendous amount of denial among workers, including myself," said Richard E. Jerome, a crew chief in central maintenance who has worked at Sparrows Point for 31 years, following in the footsteps of his father, uncle and father-in-law. "Now we've been through it all."

In the bankruptcy, the pensions of more than 90,000 active workers, retirees and their dependents were terminated and handed over to the federal Pension Benefit Guaranty Corp.

That caused retirees to lose health care, and some lost part of their pensions. Those still on the job had to stay until they turned 62 to collect from the government, years beyond when many had planned on leaving.

But for those working, the relationship with that new management turned out to be a good one. Workers had a role in decision making, said John Cirri, president of United Steelworkers Local 9477, which represents the plant's hourly workers.

Then, just as they were getting comfortable, they were hit with the news in 2005 that ISG sold the plant to Netherlands-based Mittal Steel NV.

Local workers said Mittal didn't maintain the close relationship that ISG did. When Mittal made an effort to trim the work force amid competition from abroad, many workers took buyouts and signed agreements that they wouldn't return.

During the past couple of years, however, the changes helped Sparrows Point to become a profitable and efficient operation. It now produces about 3 million tons of steel a year and earns $100 million in profit. Workers also were earning more than ever before, thanks to incentive payments tied to productivity under a deal negotiated with ISG.

Mittal continued to honor the labor agreement that workers say could earn them $90,000 a year if they could handle extra long hours in a dirty and dangerous environment. That gave many of them a comfortable middle-class lifestyle at a time when U.S. manufacturing jobs had dwindled in just about every industry.

But then another shoe would drop. Mittal merged with Luxembourg-based Arcelor SA to create the world's largest steel producer and the U.S. antitrust regulators ordered the sale of a plant. They would learn that the plant would be Sparrows Point. After granting several extensions, the Justice Department said the final deadline would be Monday.

Now, the workers say they don't dwell on the past. They want to see workers hired, investment in the plant and opportunity for future generations after they retire. Mostly, they want some sense of stability.

"Every time we get comfortable, we get the rug pulled out from under us," said Roger Church, a truck coordinator with 29 years on the job at Sparrows Point.

"Our sense of uncertainty is understandable when you consider what we've been through, and we don't know what their plans are," he said. "But the attitudes seem to be better this time. There's more optimism."

Cirri also is optimistic. He said he doesn't expect the work force to shrink or the provisions of the union contract - which expires in September next year - to change significantly because of a "succession clause" in that document. It requires union approval for a sale.

What he can't say with certainty is what the next contract will say, or what the new owners will want to do with the plant. Esmark executives said they want Sparrows Point to produce more steel slab for use at the finishing plant that it acquired last year when it bought West Virginia-based Wheeling-Pittsburgh Steel Corp. They expect the work force to remain at its current size or grow.

"We need to see the business plan," Cirri said. "We want investment in the plant. We want to hire some people. And, we want to bring the partnership level to what it was under ISG. ... I'm not going to make up my mind about them until I see the plan."

meredith.cohn@baltsun.com

hanah.cho@baltsun.com

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