With new buyer, Sparrows Point faces a possible end to decades of steelmaking

High bidder for Baltimore County steel mill redevelops industrial sites, is partnering with a liquidator

August 10, 2012|By Jamie Smith Hopkins, The Baltimore Sun

Steel from Sparrows Point built the Golden Gate Bridge, the Chesapeake Bay Bridge, hundreds of ships for World War II and livelihoods for tens of thousands of Baltimore-area families.

The story of the massive steel mill follows the arc of American manufacturing — rapid ascent, years of dominance, a generation of shrinking employment and decline. In the last dozen years, the mill has had five owners, two bankruptcies and many furloughs.

Last week came a stark warning that the final chapter in its 125-year history could be at hand. At a court-ordered auction Tuesday in New York, a redevelopment firm partnering with a liquidation company won the bidding for Sparrows Point.

"This was once the largest steelworks in the world," said Deborah Rudacille, author of "Roots of Steel: Boom and Bust in an American Mill Town," a workers' history of Sparrows Point. "So the fact that it's now being liquidated is hugely significant, not only for Baltimore but for the entire American steel industry."

Some already are mourning. Others vowed to fight, to spend the next months searching for a company that wants to run the mill rather than dismantle it. Still others are fighting another battle — to avoid a repeat of the last bankruptcy's aftermath, when a judge ruled that the company buying through the bankruptcy sale was not on the hook to clean up any pollutants left by its predecessor.

The $72 million bid for the mill — made by St. Louis-based Environmental Liability Transfer as part of a joint venture with Illinois-based Hilco Trading — is pocket change compared with the $810 million that Sparrows Point sold for in 2008. Steel analysts were perplexed.

Both Environmental Liability Transfer and Hilco declined to comment, and the deal isn't final unless approved by a federal bankruptcy judge. A hearing is scheduled Wednesday in Wilmington, Del.

Approximately 2,000 men and women worked there until the mill was idled following the May bankruptcy of owner RG Steel. All anxiously await answers. What are the buyers' plans? When will the benefits paid by RG Steel to the ranks of the laid off run out? How bad will the ripple effect prove?

The company said in an email to managers after the auction that Hilco "pledged not to destroy key steelmaking assets for 6 months while the unsecured creditors attempt to find an operator." But beyond that, little is known.

"It's such a mess," said Dundalk resident Mike Hartnett, 56, who is the fourth generation of his family to work at the mill — his daughter is the fifth. "It's going to be devastating to the community. When you consider the contractors, the vendors, the local businesses that are going to be impacted by it, it goes very, very deep."

Until recent weeks, Sparrows Point was one of the largest private employers in Baltimore County. But once it was the state's largest, with more than 30,000 employees during steel's post-World War II heyday.

The operation itself dates back to 1887, when the Pennsylvania Steel Co. bought up farmland to build a modern steelworks. Sparrows Point's first pig iron was produced in the new blast furnaces two years later.

Bethlehem Steel, the mill's longest owner, snapped the complex up in 1916. The company built almost 500 Liberty and Victory ships near Sparrows Point during World War II — it ran shipyards as well as the mill — and supplied steel for major capital-improvement projects.

Besides the Golden Gate and Chesapeake Bay bridges, Sparrows Point steel was shipped out to build Boston's Third Harbor Tunnel (now the Ted Williams Tunnel) in the '90s.

For decades Bethlehem Steel ran a company town for employees and their families that included, by Elmer Hall's count, seven churches, four schools, a bowling alley, a movie theater and multiple stores and restaurants. "Not to mention the 5,000 residents," said Hall, who grew up there.

The town was torn down in the early 1970s to make way for the massive "L" blast furnace that's still in use today. Or was, until the bankruptcy.

Now 70 and living in Parkville, Hall organized a reunion of former company-town residents — Aug. 18 from 9 a.m. to 5 p.m. at North Point State Park — to coincide with Sparrows Point's 125th anniversary. He didn't expect that it also might be the mill's final year, or that the book he's writing about the mill's history could reach from start to finish.

"This could be it, as far as the final footnote," said Hall, whose parents worked at the mill and who worked there himself before he became a teacher.

Joe Rosel, president of United Steelworkers Local 9477 in Sparrows Point, isn't ready to write the steel mill's obituary. Like many at the mill, he followed relatives to work there. He wants younger residents of the region to have a shot at the good-paying jobs with benefits that the mill provided.

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.