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.