The general manager of the Sparrows Point steel mill in Baltimore County told a county economic development official that part of the plant will shut down temporarily this summer, putting hundreds of employees out of work.
Baltimore County Economic Development Director David Iannucci said during a budget work session with the County Council Monday afternoon that general manager Thomas Russo told him the blast furnace would be temporarily shutdown in June.
Iannucci said he was told the shut down would affect at least a third of the plant's 2,500 workers. The closure would be short-term, although nobody knows exactly for how long, Iannucci said during the meeting.
Russian steelmaker Severstal, which owns Sparrows Point and several other U.S. steel mills, is suffering from a slowdown in demand for steel caused by the global economic recession.
Russo's office referred calls about a shutdown to Severstal. A Severstal spokeswoman would not say if there are plans to shut down Sparrows Point.
"We're continuing to review a variety of options at Sparrows Point and at all of our other American facilities to match our production levels with our order book - and that review is ongoing," said spokeswoman Bette Kovach.
When asked about Russo's conversation with Iannucci, Kovach said, "I was not part of that conversation and I cannot say that."
Iannuci said yesterday through his spokeswoman Fronda Cohen that he would not further discuss his remarks during the meeting.
Cohen said things are fluid in this economy and that only the company knows what is in store for Sparrows Point.
Union leaders said a decision about a shut-down hasn't been made and a final determinant will be the economy.
"The possibility is there," said John Cirri, president of the United Steelworkers Local 9477.
Councilman John Olszewski Sr., who was at Tuesday's meeting with Iannucci, said the county would work to offer employees assistance if there are layoffs.
"You have to figure there are a good percentage of individuals who work at Sparrows Point who live in the Dundalk, Essex, Middle River area," said Olszewski, whose district includes Sparrows Point. "If people are laid off for 30 or 60 days, that is going to start affecting local businesses."
Severstal operates four plants in the U.S. and has moved the work of three to Sparrows Point, he said.
"The Sparrows Point plant is still not operating at capacity and there are no early signals of a turnaround," Iannucci said.