Severstal CEO Alexei Mordashov

Severstal is shipping steel slabs from Russia, an action that is sure to inflame union-management tensions as the Sparrows Point steel mill prepares for a temporary shutdown of its furnaces.

The United Steelworkers Union has maintained that supplying slabs from other mills would be in violation of an agreement between Severstal and the union, reached when the Russian conglomerate purchased the mill two years ago.

But now, The Brew has learned, a ship carrying more than 20,000 tons of semi-finished slabs has left Murmansk and is due to arrive at Sparrows Point shortly.

Asked if the company was importing slabs, Bette Kovach, spokesperson for Severstal, said in an e-mail last night, “We do not comment on rumor or speculation.”

More boatloads of slabs are due from Severstal’s Russian and U.S. mills. The slabs will be used to feed the Point’s finishing mills and fulfill customer orders while the steelmaking facilities are idled in July, impacting some 700 workers.

Importing steel to American mills is a sore point with the union. According to USW sources who insist on anonymity, Severstal agreed to import slabs only when domestic steelmaking facilities were at 100 percent capacity.

Production at Sparrows Point has been running below capacity for the past nine months, in part because of changes in blast-furnace feed mandated by management to reduce costs. The blast furnace makes pig-iron from iron ore and other raw materials.

John Cirri, president of USW Local 9477, met Tuesday with Severstal management to begin thrashing out terms for the 700 workers impacted by a 30-day suspension of steelmaking due to begin around July 1.

Severstal indicated Friday that the shutdown would result in an undisclosed number of layoffs. Some workers may be “bounced” to other mill jobs, take voluntary layoff or retire. Cirri could not be reached for comment.

A source privy to the talks said this: “The company doesn’t know what it wants except that it’s desperate to save cash. It seems to think it can switch Sparrows Point on and off like a light bulb.”

The union has been locked in a dispute with Severstal over a restructuring plan that would eliminate up to 600 union jobs and place many employees in joint ventures operated by small satellite companies.

“Is shutting down [the furnaces] for a month a ploy to get the union to agree to the restructuring? That might seem logical, but every day there’s something new coming [from management],” said the same source.

The restructuring plan has angered some rank-and-file employees, who say it will create a two-tier wage and working system, while others say they are resigned to the plan and only hope their jobs will be saved.

In a related development, Severstal is offering a $10,000 bonus to employees who retire by June 30. The bonus covers both union and salaried employees.

Since the dismissal of plant manager Thomas Russo in March, there has been a steady exodus of mid-level managers who have elected to retire from the mill.

Mark Reutter can be reached at reuttermark@yahoo.com.