Sparrows Point will receive a limited amount of steel from a non-union mill in Mississippi while layoffs will continue to rise, John Cirri, president of Local 9477 of the United Steelworkers (USW), has confirmed to The Brew.

The steel shipments are controversial because the Columbus, Miss., plant has been lavished with new investment by Severstal, while Sparrows Point’s capital budget was slashed even before the Russian company began idling the mill this summer.

Severstal promised to spend $500 million to expand and modernize the Baltimore County facility when it bought Sparrows Point in 2008. After the world recession began in late 2008, Severstal axed  plans for new coke ovens and a plate mill at Sparrows Point and concentrated on Columbus, selling $525 million in bonds for mill expansion.

Many local steelworkers are convinced that Severstal is diverting both customers and orders from Sparrows Point to Columbus. Severstal has not addressed this concern and has instead blamed a weak economy for the idling of the Sparrows Point furnaces.

The present mood at Sparrows Point was captured by an e-mail to USW members by Dave Polanowski, a top local official, who shared part of his message with The Brew:

“We were known for making quality steel for all Americans by Americans. Now we can only say steel rolled here. Boy, that is two different sayings. One you lift your head up high, the other makes you want to put your head in the sand and hide,” Polanowski wrote.

The Columbus mill is expected to ship 10,000 tons of hot-band steel a month to Sparrows Point, supplementing 40,000 tons of hot bands now being supplied from Severstal’s Warren, Ohio mill.

The steel will be used to process tinplate, the only fully active production facility at Sparrows Point, and for a limited number of other customer orders.

650 Steelworkers on Layoff

Cirri also gave the first solid figures regarding layoffs at Sparrows Point.

At present, 650 union workers are laid off. “That number is predicted to reach 1,000 by the third week of December if the current course remains unchanged,” Cirri said in a memo to union members.

Last week Severstal issued a plant closing notice, known as a WARN notice, to employees and extended the shutdown of giant “L” blast furnace and other steelmaking operations through the first quarter of 2011.

Cirri issued the following statement to The Brew on Saturday:

“I have been informed that our International Union has agreed to a limited amount of hot band, 10,000 tons a month, from the Mississippi plant (non-union) for a short duration and most certainly in the name of preserving jobs and what customer base we have left.

“It is very distasteful and unfortunate, but for now it is the position we have been put in. Severstal seems hell-bent on proving some kind of point by not selling us raw materials comparable to their other plants that would allow us to be in a better position to compete by restarting our furnace, but it is costing them millions a month and a disgruntled workforce in doing so.”

State Talking to Severstal

Cirri said that Maryland’s elected officials, led by Gov. Martin O’Malley and Congressman C.A. “Dutch” Ruppersberger, remain active in an effort to preserve jobs at Sparrows Point.

Last week, the Maryland Department of Business and Economic Development and a number of elected officials met with Severstal representatives at the Baltimore World Trade Center to discuss ways the state could help the company.

The discussion was a follow-up of a meeting between Gov. O’Malley and other politicians and Sergei Kuznetsov, CEO of Severstal North America, in late October.