At a meeting last week with state legislators and others not open to the public, the general manager of Severstal Sparrows Point confirmed that Russian-made slabs were delivered to the mill, a move that has caused an uproar among employees who may be facing layoffs next month.

General Manager David A. Howard underscored the facility’s uncertain fate by telling attendees that there was no guarantee that steelmaking operations would reopen after a scheduled downtime of 30-45 days. “He said he hoped to get the furnaces running, but said it all depended on orders and raw material costs,” said a person knowledgeable of the meeting.

With the furnaces scheduled to close in about 10 days, the company has not informed the union of how many workers may be laid off or reassigned, according to John Cirri, president of United Steelworkers Local 9477, who lashed out at the company.

Temporary Shutdown Denounced

In an e-mail to members, Cirri said, “Our furnace being shut down is a dark moment in our history. Also, a dark moment is your union being shut out of very important decisions being made that will affect the livelihood of its members…

“The company to date has still not shared any plans with us as to what effect their decision to idle our primary [steelmaking] side will have on our members. I have not been invited to any meetings regarding such decisions, nor asked to have any input.”

Cirri said the union “has initiated” a grievance against Severstal for importing the slabs. The union says the arrangement violates an agreement that Severstal made with the union to use U.S.-made steel when it purchased the mill in 2008.

Today Cirri and other officers are scheduled to meet in Pittsburgh with Dave McCall, the top USW negotiator, and representatives from Severstal.

“As you can see by their recent actions,” Cirri concluded in his e-mail, “the company is taking us back in time. We all know that if you don’t learn from the past, you are doomed to relive it and we all know the devastating consequences the past had on thousands of both active and retired steelworkers. And we refuse to just sit back [and] accept the same mistakes.”

Making Mill Cost Competitive

The Severstal meeting – held at the general manager’s offices last Thursday evening (June 17) – was open only to an invited group of politicians and community and environmental groups.

Among the 18 or so in attendance were state Senator Norman R. Stone and Delegates Joseph J. Minnick and John A. Olszewski, along with representatives of the Chesapeake Bay Foundation and Maryland Department of the Environment.

The media and general public were not invited so that the company could discuss more frankly the problems facing the biggest manufacturing facility in the Baltimore region.

Plant manager Howard said the mill ordered the slabs from Russia (about 20,000 tons so far) because it could only fill 38 percent of its orders on time earlier this year. After the decision was made to order the slabs, the backlog of orders fell off precipitously to the point where it was necessary to temporarily shut the blast furnace to readjust inventories.

He said the Russian slabs now at the mill will be used for processing into finished steel products. They amount to less than 10 percent of monthly production. The Brew has learned, however, that more slab shipments will be arriving by ship from Russia and Severstal’s mill at Dearborn, Mich.

Importing slabs from Russia now costs less than the spot market price for the raw materials to make steel, Howard indicated. He said he was determined to make the Point “cost competitive” to mini-mills that make steel from scrap rather than iron ore.

Mini-mills are putting serious pricing pressure on the Point, Howard told the group, along with the new ThyssenKrupp mill about to start production next month near Mobile, Ala.

A restructuring of Sparrows Point’s labor and production costs will be completed by the end of the year, he added, without going into specifics.

Water Leak at L Furnace

Shutting down the L furnace, known as a “blow down,” involves the controlled cooling of a furnace that operates at 3,900 degrees at the center of the hearth.

Last week, the process “came close” to undergoing “a serious problem” when water leaked into the furnace, according to Cirri’s message to members.

Cirri reported that “the furnace was beginning to cool down, which would have caused the iron to solidify in the furnace. Don’t need to tell you that may have been the beginning of the end for the ‘Beast of the East,’ especially during the market downturn.”

The problem was corrected, Cirri wrote, and “the blow down is back under control.”

The mammoth L facility is the only blast furnace left at Sparrows Point. If the furnace is down, all raw steelmaking ceases. A full shutdown is expected to be completed by July 1.

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