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RG Steel plans to idle Sparrows Point tin mill in April

March 2, 2012 at 5:40 pm 40

The Brew has learned that RG Steel plans to wind down operations at the Sparrows Point tin mill on or about March 24 and cease tinplate production altogether by the end of April.

The company will transfer existing orders to its Yorkville, Ohio, plant and does not expect the Sparrows Point operation to reopen until early 2013, when the packaging industry renews its annual contracts.

As reported yesterday, the temporary shutdown of the Baltimore County mill before Christmas played havoc on tin sales and scared away  customers that were finalizing their annual orders. (The packaging industry negotiates one-year contracts with steel mills at the end of the previous year.)

Layoffs May be Minimized

While about 300 people are employed at the tin mill, only about 80 United Steelworkers (USW) employees are expected be laid off when the tin mill closes, well-informed sources told The Brew today.

The USW is seeking to use voluntary layoffs (VLOs) to keep the number of forced furloughs to a minimum. Many workers with seniority can be absorbed into the larger workforce, which has a number of vacancies due to employees leaving or retiring from the company.

Under current plans, which are subject to change, the tandem mill will be closed on March 24, followed by the closing of the plating lines in late April.

A small part of the mill, known as the annealing lines, is scheduled to run after April. This operation employs roughly 15 people.

After April, the tin mill will be placed into “asset preservation mode,” so the mill could be restarted in the future.

RG Steel management has told union officials that it plans to stay in the tinplate business, but has far too few orders to make running the large tinplate operation at Sparrows Point sustainable.

The company is under intense pressure to turn around its money-losing operations and become “cost neutral” by April.

It was able to reopen the “L” blast furnace last month only after an emergency $125 million cash infusion from Cerberus Capital Management, a private equity firm.

 

 

 

 

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  • kojac

    I keep hearing “cost neutral”. I’m no genius, but how many  long term viable business entities have a goal of being “cost neutral”?

    • George

      Kojac many big companies run at a temporary loss.  The Small Business  Administration suggests that new companies have 5 years of working capital just to cover them until they get established.  I really believe that SP is cost neutral, but the accountants are very cautious and prefer to err on the conservative side.  Kojac , I am no genius too, but it is easy to see that the Beast is going through one heck of a lot of ore, this ore is going out the door as Pig and hotbands/coils.  Add to the mix slabs and you have a recipe to pay all the bills and I like that.

      George

  • Wci8757

    george. one of the last things you said was your crushing the compitition. now you know i always believe what you say. and cambell soup to. you remember that one. your sure pulled my leg on that one. just like you have so many times before.

  • Wci8757

    george. i forgot to add. did you read walters post on the tin plate. now somebody is pulling  someone’s leg for sure. who is it. you or walter.

  • Outside Looking In

    Kojac US Steel lost 2million a day for the fourth quarter.AK Steel nearly lost 2 million a day also.RG started up Sparrows Point with virtually nothing on the ground as far as raw materials on the ground.They also had to offer their cUstumers discounted prices to lure them back.Im not down playing the losses but in my time here it has always been the same.You make money while you can and try and get by in the lean times.Going into Christmas week we had nearly full order books of tin for the coming year.We also had strong orders for coated and cold rolled orders.Raw material prices were coming down and price per ton was going up.Then the bankers……the majority of which were European banks that were dealing with their own problems created a liquidity problem by requiring a higher reserve requirement.

  • joe

    All union members can go to this web site to find out your rights concerning union elections and other problems you may have.
    http://www.uniondemocracy.org/legal/lmrda.HTML
    If this link doesn’t work just Google. union members bill of rights.

  • joe

    All union members can go to this web site to find out your rights concerning union elections and other problems you may have.
    http://www.uniondemocracy.org/legal/lmrda.htm
    If this link doesn’t work just Google. union members bill of rights.
    The link in the 1st post didn’t work Try this one These are the laws that govern among other things union elections and bylaws
    The law is also known as the Landrum-Griffen act It may be of help to 1190 and sp workers.

  • Northpoint611

    Why don’t you give the union another percentage raise from your hard earned pay check. They seem to have plenty of your union dues in their coffers to fund the fat cat Washington croud!
    The f===king domestic steel industry is DEAD!!! The blood sucking comunist unions killed it and they continue to hang over it’s decaying carcus, milking every last drop of blood money they can get from the stupid “United We Stand” steelworkers.
     The made in America steel industry is over, it’s DEAD!
     Thanks to the USWA. Thanks for nothing!!

    A struggling Bethlehem Steel retiree. 

    • Walter

      Northpoint611, good the hear from you, but please let me set the record straight. You know in your heart, as we all do, that the union is very active with our elected government officials and this takes time and money to support the best candidate.  Even Dr. Doom admits that the elected crowd in Ohio and West Virginia are helping to kill the unions, business, jobs, and the American dream, do you want the same for the children of Maryland?

       The SP union leadership can pick up the phone and have the Senator or the Governor answer with a “YES SIR, we will get right on it for our Maryland steelworkers, yes sir, we understand how important SP is to the state’s and nation’s industrial base and domestic security.”   I am sorry that you do not believe in the bumper stickers we used to give out saying – LIVE BETTER WORK BETTER WORK UNION, I still believe in “United We Stand” we are the “Forward Together Team”, and when I go by the big beautiful union hall on Dundalk Avenue with the large mosaic stone picture of the steelworker it makes me feel proud!  At least you are retired and not on the street and are doing a thousand times better than retired non-steelworkers.  Just count your blessings and look at the bright side!  Beth Steal took much of my money too, I must work harder just so I do not slip back too much, but its a changing world out there, please do not blame your union or the new folks trying to figure out the best way to keep iron making alive at the Point. Iron is like bread and milk, America is always in need of it, so it makes sense to keep the Point’s hot end working for the next generation of Americans.

      Walter

  • Dr Raymond Boothe

    I just recently read the article by Steel Market Update and there a few incorrect items I would like to point out. First  the closing of the SP tin mill closing was brought out by myself in the Brew, and not by sources in Steel Market Update. The tin mill was closed due to the closing at the L blast furnace at a time when tin mill orders had to be secured.

    Secondly , a lot of the substrate from SP that was shipped to Yorkville had to be shipped back because of quality issues. This poor substrate held back the manufacturing of tin at Yorkville. Warren, who makes substrate for RG Steel’s highest quality steel could not deter all of its  coils to Yorktown.  Customers in the tin trade,were not pleased with the SP mills quality, its lack of interest in shipping deadlines and SP general attitude toward its customers. This was certainly the core of customer’s doubt concerning the SP tin mill. Also the substrate produced at SP’s hot end is not the quality produced at Warren and Mingo.

    Trying to blame this situation on Warren and Severstal is just another attempt to coverup a situation created by RG Steel, the USW and the Maryland politico. The tin mill is too large to make money and any hopes of operating it at full production will never happen. RG Steel’s best tin and coating facilities lie in the Ohio Valley,and with the Mingo Pant they they are the right size to make a profit. These facilities (all away around) are better balanced.  

    Trying to sell the consumers of tin mill products that L furnace is operating (with gifts of cash, scrap and coke) does give them any certainly in the least. If they are smart they will realize that Mingo and Warren are better balanced for their size , and will be able to produce their products on time, with the quality they ask for.

    With all the problems at RG Steel, SP, their management and the USW telling the employees that starting up an old coating unit will save their jobs is just a sad joke.
    RG Steel is heading toward April in a dying spin, closing down what they can to save money.

    At least at SP they will have a large pile of iron ore and coke to to sell in order to support management’s retirement fund. 

    • Outside Looking In

      @Dr…..The point of the article was to give background information as to why a once profitable division was hamstrung by Severstal.Im begining to belive that nothing no matter how factual that doesnt fall into your way of thinking is dismissed out of hand.By the way did you comment on the article in Steel Market Update and correct the wrong information in it?

    • Outside Looking In

      I wouldve thought that you would approve of the closing of the tin mill and the transfer of the remaining orders to Yorkville.Isnt that what you have been asking for ?Doing whats is prudent for the company.

    • Outside Looking In

      As to starting up the coating line,that was a decision that was in tge works before Christmas and was dictated by the amount of orders we have for the NGL.By starting up the line we can free up the NGL .

  • Outside Looking In

    Please be aware that Walter and George are a couple of guys who like to pull y’alls chain.

  • imnew

    love to no what crowe and ravasio fucked up this time they dont care they never lost a penny in this mess trying to get a hold of somebody from yorkville local does anybody no if they have a president or any union officials you would think these other locals would try to find work for 1190 brothers that are out of benefits i thoght that was what union was all about

    • 1190memberforjustice

      i believe jerry conners is a good man, he has tried to help, but our 1190 reps. need to get off there butts and get the older people back to work, there is alot of jobs these people could be trained on very easy, this has gone on way too long.  the last time i looked there were no brain surgeon jobs on the schedule.

      • 1190 Shame

        I was told there are about 36  outside contractors working to put crane rails up. Connors had to approve this.  what kind of a union do they have down there? Makes me wonder. Sounds like he  does’nt care about us 1190 union brothers.

        • imnew

          i think your right my  brother my buddy works at yorkville and said they need mtms but we cant get conners to return any of our phone calls i thought he might have been a good union man like there old pres rocky was or phil patochi but he must be like all the rest of them

        • 1190memberforjustice

          your right, guess i was wrong, i heard alot of good things about him but must be the same as 1190, all depends on who you are.

          • Jbuck

            I’m sure the 2 contract co-ordinators and the staff man run his local just like they run 1190. They decide who can work and  who can run for office.

          • 1190 Shame

            Well, this is the guy that went to the company and wanted equipment tenders put on. Remember how that worked here? Sad, I could have had my benefits renewed along with  some of my  1190  union brothers. My buddy tells me they have  2 crews with  18 guys on each crew putting up crane rails. He tells me  they have outside scabs there all the time.

          • Budsmollen

            connors had enough respect for his membership to allow every member the right to run for local union office. unlike the local 1190 president who is using his position to keep the members he swore to represent from running. connors and rocky brown both let their members run for office, both of these men respected the democratic process. local 1190 reps should take lessons from these two real union brothers.

          • guest222

            And just how many people there  have been laid off for three years now!! Of course they can still vote!!

          • 1190 Shame

            I worked down at Yorkville back in 08 when they were having all the OSHA isuues. Rocky Brown made sure we all had lockers a lunchroom and that we were treated fairly by management. He had no problem bringing us down there. Seemed like a good union man. Don’t know about Conners.

  • imnew

    that is what 1190 has to do they say you have to have meetings when everybody that has been laid off for 3 years are out trying to support there familys and dont have time for every meeting so the same people that got us in to this mess dont have to run against good union men the financial man will sit another 3 years collecting 64 hour a week and the company paying him the other 16 hours this guy has not had work boots on for at least 15 years and his son with only 9 years in the mill has not missed a day in3 years there is something wrong with our union they are very weak   what a shame     

    • Drewk2

      Ever think about re-taking 3rd grade English/Grammar/Writing class while your laid off?

      • imnew

        you ever think about kissing my polish assssssssss

      • 1190memberforjustice

        sounds like you are one of the geniuses up the 1190 union hall?

  • warrensteelman

    and this is the same union guy that made a deal to get a schedulers job, a union man a scheduler, 1190 members better think about that before they vote.

    • ready 4 action

      he also made a deal and got vlo when no one else could!  he also was chief shop steward before batistal and was voted out!  and that was when all of the original coke plant people were still working! that should tell you something.

      • Jbuck

        i was at the union meeting when the local president said he asked dan to work that schedulers job, i was also at the meeting when the international rep said the grievance man who won the grievance in third stage giving dan vlo did one hell of a job. why do these union reps want all the young people out of the coke plant, but dont care if they continue to work in mingo?

        • 1190memberforjustice

          plain and simple SENIORITY, do you have enough time to know what that means!

  • Anonymous

    From B Brew:

    To Burttripod and others. With union elections coming up, The Brew will NOT publish comments attacking individual members and will not publish material that is irrelevant to “our beat” — Sparrows Point and RG Steel in general, which includes the operations of the Ohio mills but not internal union politics. Thanks for following the rules. -mr

    • Burttripod

      That’s prob. a good idea  Thank you for allowing the reply

  • udontknowshit

    wallter and george r management

  • warrensteelman

    why would a union man ask another union man to be a scheduler, somethings not right there, no way should a union man be a scheduler even if the president of the united states ask him, so dont make excuses there is no way that should happen.

  • Dr Raymond Boothe

    I know that union relationships are important-but as I said earlier the problem at RG Steel is the lack of management skills and forsight. As long as Ira and Goodwin (plus their USW buddies) are running the show the ship will continue to sink. Goodwin operates RG/SP as it was in the late 1970′s-not adapting to today’s worldwide steel competition.You have to adapt, and use the the best you have to make an impression on the market. This is why most people don’t understand why Goodwin and his buddies are not running Mingo. It is a highly productive and innovative plant. Yet it is not operating and just sitting there idle.

    ALL the unions throughout RG Steel need to demand a change of leadership and change of direction at RG Steel. This is what the vendors and customers are wating for. They want
    security-or they will go someplace else FOREVER. Why don’t the leadership realize this.
    The best thing to happen to RG/SP lately is closing down the SP tin mill and sending it to Yorkville, where customers know that the employees will not deliver a product that is sub-par. The same is true with Mingo. Let them make the downstreaming substrate for Yorkville and Ohio Coatings and you will see an increase in sales. Let Mingo process slabs for Warren to make additional profit and let Mingo to supply slabs for outside contractors and
    80-inch coils. In other words there are many possibilities. So please use us or let us go to somebody who will use us.

    The primary problem with Ira, Goodwin and their management is that they think and act like they make steel in the dark ages. The markets and techniques have advanced beyond them. A lot of mistakes were made and continue to be made with the management. As I said before the biggest mistake was made when the L blast furnace was built. The huge blast furnace and 2 BOF’s just do not make a good combination. Too much iron to use at full capacity. Trying to pig- it really goes into a poor market where the Brazilians rule.So, this
    disbalance makes the plant continually go into the hole. Now with the tin mill gone, the galvanizing line and caster suspect it is a wonder anything is working. Finally the hot strip mill is old equipment and does not come up to the 80-inch coils at Mingo, the kind of coils demanded by the auto and other heavy industries.

    It will take a well seasoned and market savy leader to bring RG Steel into the realm of modern steelmakers. It can be done, but new and smart leadership is critical. If the management problems continue as they are, the ore boats at SP will turn around and go back to Africa and Canada. The employees and UNION MEMBERS must act in a positive manner, and QUICKLY.

  • warrensteelman

    39yrs, not much time, no way a union man should be a scheduler, thats all there is to it. and as i stated before  you at 1190 better get the people working by seniority, thats union, tell your international about that.

  • msc#1operator

    whats this new rule about no bumping now?

  • outofeverythingwithseniority

    if the union was concerned about the people that can work why not bring back the people with seniority or dont you believe in seniority, i think you are the one with no time working under the friends and family plan. this is not union at 1190. all the reps care about is keeping the people with seniority out of work so there friends and family can stay working and thats a down right dirty shame, union my ass.

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