Sparrows Point's main operations to remain idled

Only the tin mill continues operations

September 14, 2010|By Hanah Cho, The Baltimore Sun

The primary steel-making operations at Sparrows Point will remain idled for the rest of the year until market conditions improve, the Russian company that owns the Baltimore County mill announced Tuesday.

The continued shutdown adds to renewed uncertainty for about 2,500 workers at the plant, which has seen periodic shutdowns and a succession of owners in recent years. Severstal North America, a subsidiary of one of the world's largest steelmakers, is reportedly looking to sell the Maryland mill and other financially strapped U.S. plants.

Sparrows Point workers have been operating for several months under extensions of an old contract because their union has not been able to negotiate a new agreement with Severstal. It is unclear how many workers will be affected by the latest development. In a previous idling of the plant this summer, some workers were reassigned to maintenance duties.

"Through four owners, the light of a bright and secure future for Sparrows Point has never looked so dim," John Cirri, president of United Steelworkers Local 9477, wrote in an e-mail to plant employees before the company's official announcement.

The union has turned to state and local officials for help. Gov. Martin O'Malley, Sen. Barbara A. Mikulski and Baltimore County Executive Jim Smith have written to Severstal in recent weeks, asking for clarity on the future of Sparrows Point and emphasizing its historical and economic significance to the region.

Mikulski wants the company to make public any plans to sell Sparrows Point. Severstal has declined to comment on reports of a possible sale.

"The fates of several thousand workers and their families, as well as a significant portion of the domestic steel industry in the United States, hang in the balance," Mikulski wrote to Alexey Mordashov, chief executive of Severstal's parent company. "It is unconscionable to withhold even the most basic information about what to expect and what lies in store for the approximately 2,500 workers still employed at Sparrows Point."

Cirri said in his e-mail to employees that he hasn't seen any response from Severstal to their inquiries.

The plant's steel-making facilities have been shut down since July, which included idling the blast furnace. Union officials had expected those operations to resume in October.

But Severstal North America said in a news release Tuesday that the plant will remain idled "until there is an improvement in market conditions to warrant their restart."

Demand for steel has been waning as construction companies and other customers have stopped placing orders. And steel prices have fallen, hurting profits.

Severstal said finishing operations at the plant will continue to run on reduced schedules. The company did not provide details. Workers were temporarily laid off for a two-week shutdown last month.

Only the tin mill, which makes cans, will continue running as usual, Severstal said.

Cirri was expected to meet this week with plant manager Dave Howard to "go over the details of why Severstal has decided to take this path of uncertainty," according to the e-mail. Cirri did not return phone messages Tuesday.

"I understand everyone's frustration and anxiety and Sparrows Point has been through some dark periods in the past, and while this indeed is the darkest we have seen, we have always managed to pull ourselves up to relight the torch," Cirri wrote in the e-mail.

In August, union officials said Severstal was looking for a buyer for Sparrows Point and its other U.S. plants. The most recent shutdown also affects Severstal's plant in Wheeling, W.Va.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.