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At Sparrows Point, a way of life under threat again

Another body blow to blue-collar Baltimore.

sparrows point blvd

The main road into Sparrows Point yesterday. The idled L blast furnace looms in the background.

Photo by: Mark Reutter

The layoff of Sparrows Point employees on Friday, just two days before Christmas, reminded me of something Ben R. Womer once said about the role of steelmaking in the blue-collar precincts of Dundalk and East Baltimore.

Ben was the unofficial chronicler of Sparrows Point back in the day when the mill had 25,000 employees, including five Womer brothers with more than 150 years of cumulative seniority.

Because the furnaces worked around-the-clock, Ben said, “Many a man who worked daylight on Christmas never saw his children on Christmas morning unless they were gotten up at five o’clock to see their toys when he was ready to go for work.”

“This kind of dedication could only mean,” he concluded, “that your devotion to the company that you worked for was your trademark.”

Yesterday, silence rather than smoke enveloped the flat, slag-filled peninsula that juts out into Baltimore’s outer harbor near the Francis Scott Key Bridge. Fire and steam didn’t hiss out of the furnaces. Mill trains didn’t dart between oversized sheds.

It was the day after Christmas, and nobody was working at Sparrows Point.

An Aging Champ Up Against the Ropes

Let the Wall Street analysts dissect the economic forces that caused RG Steel to suspend operations last Friday. For the 1,800 steelworkers still left at Sparrows Point (not including Ben, who retired and died of job-related causes) – the mill is more than a set of spreadsheets or coil loadings or even a paycheck. It is a way of life and a source of blue-collar identity.

For 120 years, Sparrows Point made steel for skyscrapers, ships, cars, trains, tin cans and a thousand more products.

Fifty years ago, it was the biggest steel mill in the world, spewing out 12 tons of hot metal a minute.

Sparrows Point built America. Now it’s on the ropes, an aging champ struggling against agile competitors in a down market.

Ben Womer after he retired from the steel mill. The red splotches on his face came from years of exposure to furnace heat. (From Reutter, "Making Steel")

Ben Womer after he retired. The red splotches on his face came from exposure to the furnace heat. (From Reutter, "Making Steel")

Last March, RG Steel purchased the Point and two Midwest mills from Severstal, the Russian steelmaker owned by billionaire oligarch Alexei Mordashov.

Severstal couldn’t make a go of the Point. It closed “Big L,” the plant’s 30-year-old blast furnace, and kept the finishing mills running part-time. Many customers fled in the process.

RG Steel was the creation of another billionaire – a self-made, Brooklyn-born financier named Ira Rennert who trades in troubled and bankrupt companies and lives in the reportedly biggest house in America (known as “The House that Ate the Hamptons”).

We wrote about Rennert’s controversial background and the contract negotiated between him and United Steelworkers District Director David McCall that combined jobs and kept wages at RG Steel $1.80 an hour lower than the wages of other mills represented by the USW.

We quoted one union official as happily saying last March, “Under Severstal we were dying, and now it looks like under RG Steel we’ll be making iron in about a month.”

That kind of optimism sold the new contract to Sparrows Point workers, but it’s been anything but smooth sailing since.

It wasn’t until May that RG Steel – under president John Goodwin and general manager Glenn G. Mikaloff – started up Big L at Sparrows Point.

Almost immediately, during the delicate process of reheating a “cold” furnace, L suffered an internal “slip,” which burned up a lot of expensive equipment and cost the company more than $15 million.

$1 Million in Losses a Day

By the time the furnace was making pig iron, steel prices had dropped from their March highs, and the mill was forced to sell its product below cost. Rumors began circulating that Sparrows was losing as much as $1 million a day.

Rennert, it turned out, hadn’t put much cash into the $1.2 billion buyout of the three steel mills. Severstal, in fact, had financed much of the deal by agreeing to deferred payments and buying large quantities of semi-finished metal for its mills at Dearborn, Mich., and Columbus, Miss.

It wasn’t long before Severstal was in court squabbling with RG Steel, accusing the Rennert group of trying to wiggle out of the sales price.

Tough Love From Management

Goodwin and Mikaloff were veteran steel managers who had bounced among many mills and knew all the answers.

They instigated rapid changes at Sparrows Point, firing several senior executives. Goodwin held a now-infamous meeting with employees where he launched into a profanity-laced lecture on how he was going to fix the mill through his tough-love financial plan.

The RG team made valiant efforts to lure customers back to Sparrows Point. They arranged trips to the plant and walked prospective customers through the mills to show them how well Sparrows could make high-quality coils and tinplate, a specialty.

Turmoil in the Sales Department

But at the same time they let go of the mill’s most experienced salesman, who had strong personal relationships with past customers (Update: see correction below) . Another top sales person soon left the Point to join competitor ArcelorMittal.

Equally inexplicably, Goodwin promoted the plant’s general manager under Severstal, David Howard, as manager of commercial. Howard did not have the contacts or talent to turn around sales. He, too, has left RG Steel.

Faced with either cutting production or selling below market, the company “gave away” steel as much as $40-a-ton below market prices to attract customers, informed sources say.

The strategy snowballed the losses at Sparrows.

Three months ago, No. 1 tandem mill caught on fire, stopping tinplate production for days. The Brew reported that Baltimore County firefighters responding to the blaze found that every fire hydrant at or near the tin mill was inoperative, sparking outrage among employees who felt their lives had been recklessly endangered.

Throughout this period, Rennert issued no statements as to his plans for the mill. Nor did Dave McCall, the union boss who pushed through the deal.

Meanwhile, Goodwin and Mikaloff continued their policy of refusing all comment to the media, including to industry newsletters. Secrecy surrounded the plant.

Unpaid Bills Pile Up

Then it came out, in recent weeks, that Sparrows Point was encountered raw material shortages caused by its nonpayment of bills to suppliers. Sherwin-Williams Co. sued in Baltimore County District Court, making it official. In an internal memo last week, RG Steel cited “liquidity issues” and told union officials that it hopes to conserve cash by cutting production over the next month.

On Friday, steelworkers found out that they were to be laid off this week, and that the steel-making side of the mill would be idled.

Apparently, management plans to run off inventory (steel slabs already processed by the furnaces) in the tinplate and sheet mills to fulfill customer orders. Beyond that, nobody knows. So far, the company has not released a public announcement of its intentions or issued a Worker Adjustment and Retraining Notification (WARN) notice to employees.

So the events of the last few days were no real surprise. But coming just before Christmas, the shutdown is a body blow for the thousands of  families who depend on the Point, including suppliers and independent contractors.

Recriminations against Goodwin, against Rennert, against Dave McCall quickly proliferated.

Anger, fear, finger-pointing, sarcasm and sadness have been flying around The Brew’s comments section since Friday. Just a few of more than 150 comments:

“It looks like we’re getting what we voted for.”

“Merry Christmas Dave McCall. Everyone predicted this would happen.”

“McCall sold Sparrows out! First a BS contract, then BS safety rules and you’re fired for everything! What a joke.”

“Wake up its about the future of our way of life and the way of life of AMERICA.”

“I am not a union member at SP, but I am one of the suppliers for them. I have been coming to SP for 15 yrs now and have never seen it this bad. We just got our layoff notices today. Bad news for all of us.”

“Just in time for Christmas. I hope everybody can find a new job.”

And on it goes, as the biggest industrial complex in metropolitan Baltimore enters a new year of uncertainty.
——————-———
The Brew’s Mark Reutter wrote Making Steel – Sparrows Point and the Rise and Ruin of American Industrial Might (2004), a social and economic history of the mill from its beginnings in 1886. His website, makingsteel.com, has much more information on the plant and the troubles facing the U.S. steel sector.

CORRECTION: The salesman in question retired before RG Steel acquired the mill.

Be sure to check our full comment policy before leaving a comment.

  • Cheese

    I chose not to sit around and let other people dictate my financial outcome. I left this company after the layoff last Thanksgiving 2010. Not only am I now working for a better steel mill that actually cares about safety, but I’m also working for a stronger union.

    I hope all of you are able to do the same. There are mills hiring elsewhere. It’s hard for mills to find good workers and you are most definitely needed at these other mills. They are willing to pay if you can step out of the comfort zone of Baltimore and move to another state. Don’t limit yourselves. You are worth a hell of a lot more than how this company treats you!

    With that being said, these are some of the coldest months on the point. As you all know from past experiences at the mill, this company cannot save money by shutting down in the cold months. It will cause more damage by way of  water leaks in every mill, especially mills like the BOF where these leaks cause explosions. This damage will cost more in startup costs. This is only a fool’s way of saving money. 

    • Palkie2

      What an excellent post.Anyone that can move on should move on.I also moved on with my life, because I got tired of playing in the majors for minor league pay.

  • REALSTEELWORKER

    CRY ME A RIVER!!! SPARROWS COULD CARE LESS ABOUT THE OHIO VALLEY PLANTS are hot end been shut down for over 2 years what about the jobs here in the OHIO VALLEY. Are finishing mills at Yorkville are the only thing running and we are loseing are customers left & right becouse we can’t get hot band or materials needed to run.We are told all the money is going to Sparrows they get it all we get NOTHING. My grandfather retried from Yorkville so did my father and I work here now been here for the past 23 YEARS. Here in the OHIO VALLEY WE ARE HURTING AND HOPEING EVERY DAY FOR THE RESTART OF ARE MILLS so CRY ME A RIVER SPARROWS!! CRY ME A RIVER .

    • sickandtired

      Nothing bothers me more than one human being finding some sort of gratification out of another person’s misfortune. There are SP steelworkers that genuinely care that your plant is struggling. Your anger is misplaced. As a side note… If career development is available to you, you might want to brush up on your grammar skills. It is difficult to read your posts when you confuse “OUR” with “ARE”. Our focus should be on supporting one another the best that we can. Things are what they are.

      • Wci8757

        the first shot that was fired at us came from sparrows. now if you want me to repeat some things that were said to us from them you let me know as i have a list full. now i don’t want to kick someone when there down but when you start fireing at me i am going to return fire.

        • JR

          Just because some of the people here are a-holes doesnt mean we are are. You can either believe that or not but I think we are all in this together. I wish the best for all the plants and all the people working at those plants. I hope we all pull through this with a positive out come for all.

          • Wci8757

            there is only one person that knows what the outcome is going to be and that is mr. ira rennert and he’s not talking.

        • Outside looking in

          You have been firing from both barrels right from the start. To paint all at the Point with what a few have said is just wrong. Thats the problem with pulling these companies …We all have our own problems to deal with on top of the situation we find ourselves in.So if you want to continue to trash everyone at the Point for the comments of a few.then so be it.I just find it funny that its the same handful of people going back and forth on here. I think between you George and Walter and “Guest ” y’all probably have the majority of post on the brew the last 7 months. While I don’t hold out much hope i wish my Ohio Valley brothers and sisters luck ….even as you wish me ill…..

        • BOF Boy

          We could all loose our houses and it is cold outside so sorry that some of the frustration is directed by me and others towards the other mills, but SP has been getting a lot of bad mouthing from you guys too about the contract vote. As screwed up as the steel business is I do not think a contract vote one way or the other has caused this mess.
           The problem is we do not really know what is going on, what to believe or what not to believe, everything has not been stable for steelworkers for several years now and it does not look like it is going to improve any time soon so when we are looking at losing our homes and cars and we sometimes say hurtful words to the wrong people, SORRY, I really do not know what to do or say because even the big bosses could soon be in the same unemployment line as we are now standing in.

          • Wci8757

            what the hell do you think the people of wheeling are loosing, postage stamps.

          • USWhasafewscabs

            We have been in the unemployment line for two and a half years ! What do you think we live in here in the Ohio Valley, tents? What do you think we drive ? You act like you are the only steelworker that has ever been laid off ! Pull yourself together and stand up straight. And welcome to the club. After you have two and a half years of membership, you will have earned the right to bitch and complain. Until then, take a number and go to the back of the line.

          • REALSTEELWORKER

            AFTER BEING SHUT DOWN FOR ALMOST 3 F*%^KING YEARS  U THINK NOBODY LOST A HOUSE OR CAR ? IT’S ALWAYS GOT TO BE ABOUT S.P. THATS WHY PEOPLE BASH U ON THIS SITE. YOUR NOT THE ONLY STEELWORKERS IN THE WORLD YA KNOW. OTHER STEEL MILL HAVE BEEN SHUT DOWN NOW YOUR GOING TO BANK YOUR BIG L AGAIN!!!! GOOD LUCK AND QUIT YOUR DAM CRYING WE HERE IN THE VALLEY ARE TIRED OF HEARING IT GO STAND IN LINE AND TAKE IT JUST LIKE HE DID.

          • Wci8757

            you don’t know what to belive, don’t ever belive mccall. now you can believe that.

          • USWhasafewscabs

            Good ! They should have already been in the damn line since it’s their fault there even is one in the first place. McCall and Goodwin are the two that I would love to see cashing state funded checks ! Putting those two deaf, dumb and blind assclowns at the helm of this steel ship was the worst thing Ira could have ever done ! He would have been better served to have just taken the cash and threw it into the bay. At least he would know where it went.

      • REALSTEELWORKER

        Now that the shoe is on the other foot YOU SP A HOLE’S want to stick together. it wasn’t long ago you SP boys were pretty hard on us so CRY ME A RIVER SORRY BUT WE DON’T FEEL FOR YOU.

        • tiredofthebs

          You know im getting tired of being bashed because of few people who talked sh*t.I dont think everyone in the Ohio Valley are asses just because a couple of them talk sh*t.The vast majority of the people at the Point dont wish any ill will towards y’all.

          • JW

            I feel the same but so called REALSTEELWORKEr is a real jerk. I’m a third generation worker myself and have never wished ill will on a fellow steel worker. 

      • REALSTEELWORKER

        Now that the shoe is on the other foot YOU SP A HOLE’S want to stick together. it wasn’t long ago you SP boys were pretty hard on us so CRY ME A RIVER SORRY BUT WE DON’T FEEL FOR YOU.

    • Bayjohn1

      Your a real asshole !!!! If I lived in the Ohio craphole I would meet up with you just to kick your ass.

    • hopeful in Steubenville

      Maybe those of us in the Valley should look to the marcellus shale for new jobs. It may just be time to say, “the mill is done.” My husband works in Pittsburgh now. Sooner or later you just have to move on…………..Good luck to you…..

    • don 1954

      let me start by saying i have never written on this site or basted any one on this site. i am a keeper on L furnace and started at beth steel in 79. our furnace is a 4 taphole high volume furnace that has to run at a high wind in order to make money. when we were bought rg had to know this, the problem was they brought in small furnace management that did not know how to run a big furnace if u want to make money u have to run at 200 wind making at lest 9500 tons a day the reason for this our furnace is so big.  running at a lower volume cost to much money. so it cost so much more money and more material to run that is why SP needed more money to run that not my fault thats the truth and RG should have known that. if this company did not have the money they should not have set their business play the way they did. as for us voting for the contract i have to admit i really didn’t know and i don’t belive most of us voting for it was going to hurt any one . before reading so of this post i had no idea what the other plants situations were we were not sister plants at the time.i an not cring a river to u i am just explaning some of the situations to all of u. if any one is to blame for the situation it owership and management ,with international and local union leadership not completly filling us in on all the facts. isn’t funny how this company is out of money in just 9 months

      • Wci8757

        international and local union leadership not filling you in on all the facts. while that should tell you it all.

        • Jason

          Go to the usw website. We have never been mentioned. McCall and his boys could care less about us while they make their 160k a year salaries. 

          • USWhasafewscabs

            Now, I see you are finally starting to see the light. You will also come to find, that the intensity of the light is inversely proportional to the time you have been laid off.

      • banjo

        don 1954,  You explained it all, and it makes sense. I am a Wheeling employee.  We have an EAF that can produce 270 ton heats, and can also take a hot metal charge if desired.  It can come on line, and go off line without any such thing as banking.  Our #5 blast furnace holds the record for metal produced through a single tap hole, and was ready to be fired up in late 2008.  Severstal sat on the 2 billion dollar profit they made in 2008, and shut our hot end down at the end of March, 2009.  The orders we had then were sent down to their non union Mississippi plant. It kept their plant running at near capacity. Our union would not go to arbitration on this matter.
        Severstal then shuttered SP in the summer of 2010.
        Sold it all to RG in April of this year.
        This summer The government gave Severstal a three quarters of a million dollar loan.
        How are we ever going to beat big business?

      • hanging on by a thread

        Don i personally know 2 of the small furnace bosses that were sent to the point. I can tell you that both of them were furnace men before you were hired. I’m not bashing you,I’m just telling you that at least 2 of the bosses sent to the point know what they are doing. They were p&m before turning salary. They had the experience to be offered a salary position , based on their knowledge . You can’t honestly tell me that they had the full cooperation of the P&M at the point. It’s human nature after all to resist any outside input from someone who isn’t one of you. It’s happens here , hell it happens everywhere I’m sure. But don’t think for a second that some of us here didn’t know  it was a bad decision to start up the massive furnace when we had no one to sell the steel to. I hope and pray that things turn around and we can get back to doing what we have all been trained to do. 

        • Blast Furnace Man

          hanging on by a thread you are right. I too am a keeper on  #5 furnace. I worked for both these formen. I can tell you both of them are #1. Big furnace or little they know their stuff. The operation is the same, the chemistry is the same,the only difference is the amount of  “Hot blast temperature ” & cubic feet of wind.  As long as you monitor everything & make sure furnace is moving, cast on time, get it “dry” things go pretty well regardless of size. I have been in the Blast Fce. since 1970 so I believe i’m qualified to vouch for these bosses. It seems to me that things went wrong & somone needed to take the blame. It  allways has to be “someone elses fault”

          • iknowthatsyou

            why dont you vouch for the 1100 thats layed off, are you qualified to do that, its not hard to figure out who you are.HB!

      • Wci8757

        gee, i thought that was the district directors job when he negoicates a contract to properly fill the members in on whats in it and your local union leasdership. that should tell you what kind of district director you have and the union leadership that you have.

        • USWhasafewscabs

          Has anybody seen or heard from the pud whackin weasel, Dimebag Dave McCall?

          • Wci8757

            he’s probably still sailing the seven seas with his two main lappers walter and george lookin for bulk ore carriers to highjack.

  • deekay2

    REALSTEELWORKER……OUR, not ARE.

    • REALSTEELWORKER

      ok OUR plant is RUNNING YOUR’S is NOT!!

    • REALSTEELWORKER

      ok OUR plant is RUNNING YOUR’S is NOT!!

  • A very concerned citizen

    Oh my, someone thew a wrench into this reporting.  I guess we need another update.  

  • Anonymous

    Does anybody here find it a bit troubling that neither RG or the USW  has had anything official to say about this latest corporate fiasco?? I am assuming that the corporate communications director still has a job??? That is her job, right?? To inform people what is going on with the company when there are newsworthy events. Certainly, this is a newsworthy event, yet she is conspicuously absent and silent ? How about Dave McCall?? Anybody seen or heard from him?? Do they secretly hope that by hiding in the shadows the problems will just go away?? What gives??

    • Papapump

      dave mccall is an  asshole,you will not hear anything from him or his croonies untill election time.we have to get new people in office,if its not to late

      • Wci8757

        big papa pump. you will never know how i feel about getting mccall out. i would throw a party that would go on for a month at least to see him gone.

    • Papapump

      dave mccall is an  asshole,you will not hear anything from him or his croonies untill election time.we have to get new people in office,if its not to late

  • Anonymous

    An OBSERVER OF THE STEEL INDUSTRY wanted this statement placed in The Brew today, but without a name or address appearing:

    The shutdown of the hot end, coupled with the lack of quality information coming from RG Steel, will have a crippling effect on their future order book.  Sparrows Point’s hot end has been down more months than it has been running over the past two years.

    The new ownership was suppose to offer not only hope to the SP steel community (which
    includes the company’s customers) but should have provided an infusion of much needed cash and maybe more importantly a ray of sunshine.

    If the company fails to deliver on any other their outstanding orders (and customers are currently not sure whether they will get their steel or not) it will be very difficult to get them back – AT ANY PRICE.

    Even if they deliver their orders on time – the lack of quality company communications and reassurance about what is being done to insure a future for the company will leave
    many customers to believe only the worst about the company.

    It is not only the workers at SP who are being harmed – the company’s customers are being damaged as well.  After all, it is hard to manufacture construction products, metal buildings, tin cans, etc. out of thin air.

    • Steelcros

      This is the best post so far and I hope that Company officials get a copy of it!

  • Gotta Go

    I wish you well Sparrows Point.
    I will be leaving soon, with some of my sanity left.
    I am just so tired of all the BS, lack of communication and so on.
    Sparrows really is broken.

    Nobody can tell us anything from the top, as they have no idea what is going on from hour to hour. They are just as much puppet as the rest of us victims.

  • JW

    REALSTEELWORKER is an asshole . If I’m ever in Ohio I’ll make sure to look you up just so I can have enjoyment in kicking your ass.

    • Shady78

      U  all Suck in Sparrows Point !! Thanks For Taking my 5,000 Bonus Check !! To feed that Sorry Blast Furance that you have !! Also by the way You guys gave to shits about 1800 works for almost 3 years that have been laid off !! So Cry Me A River !!!

  • Ghost of Gulf States

    This shutdown will probably be permanent.  The mills are trying to move pricing up again with too much capacity and little demand, so this market is beginning to look like a replay of 2011.  For example, cold roll sustained bases above $42.50 cwt. (the ballpark for the latest announcements) for five months out of the last three years, in 1st and 2nd quarter of 2011, and the aggressive increases created a bubble that drove pricing right off a cliff, shoving us back into the mid-30′s.   The marketing managers at these companies, like your union membership, are stuck in a time warp and will not change.  Hopefully, the smart, motivated folks among the younger workers will wake up and look for new opportunities in merit-based, non-union shops.

    Sparrows Point and RG have proven they can’t make money at anything close to current levels; if  history repeats, we’ll have a precipitous drop in the market around April or May, and who would want to restart in the face of that?  Capacity?  Thyssen Krupp’s cold roll and galvanized haven’t really hit the market yet and Severstal-Columbus is still getting their new coating line filled, so there’s plenty more that will be available in 2012.

    Welcome to the ash…er…slag heap of history.

  • hanging on by a thread

    Tired, your right we should stop bashing each other. But i have a question for you. Where was that post of yours when our union brothers out at the point were bashing us? Let’s face facts shall we. The point employee’s were warned that Ira was a no good s.o.b. Warren shouted it from the mountaintop. It’s just a shame it fell on deaf ears. But the point took the 13 pieces of silver, in exchange for the souls of many a union brother to the west. Judas (McCall) turned his back on all of us. Leo And the rest of the international ,or hell even the locals haven’t spoke out on any of what has transpired. I ask Why? Give us something ! Anything!  You know a lot of people clamored ” we want a contract ,we deserve a contract” When the sad truth is sometimes it’s better the devil you know. Now is the time for all of us to pick up the phone, bypass the local and directly call pittsburgh!!! 

    • Wci8757

      i was thinking the same think. i didn’t see one post where anyone from sparrows told them bashers to take it easy on us. the two that stick in mine mind are what street corner are we standing on and we will throw you some change and we put our garbage to the street in clear plastic bags so we can window shop. them two will always stick in my mind

  • Kumonster

    It wont be long that the shit will start to trickle down to the Ohio valley plants.No coal for Mountain State Carbon already because he can’t pay his bill,canteen company will not cash overtime meal tickets,bottled water supplier will be next so on and so forth!!!! Heard a good one today that he got a $100 million dollar loan to get him through his 4 to 6 weeks and paid $2.6 million on his coal bill to get coal delivered to MSC.Who in the hell in thier right mind would lend him that kind of money based on his track record???

  • HarryReems

    Anybody who saw Goodwin’s performance at National Steel or Wheeling Pitt has a pretty good idea where this story is going to end.  What did George Santayana say?  Those who do not read history are doomed to repeat it?

    Here’s a scenario for failure, I’m just speculating of course, hopefully it is not happening at RG:  Start with big talk and the flaming shots at the local pub.  Tell the press of your big plans.  Maybe even put out some PR materials where you and your pals are described in terms akin to rock stars. Then give profanity laced speeches and proclamations of doing things differently.  Talk about how things were done so well at your former company that was so good you no longer work there.  Next do a couple of high-visibility firings, some done out of impetuosity and to spite perceived enemies, as company performance becomes lackluster.  Shun the press.  Confide with ownership that you do not trust anybody.  Isolate yourself.  Start openly distrusting ownership, followed quickly by “where the hell is this guy, nobody even knows where he is or what he is doing”. Then wonder why ownership determines that it needs to go in a different management direction, and says as much in its own press release.

    Of course this scenario is purely fictional. Any resemblance to real persons, living or dead, is purely coincidental.  I’m just saying.

    The working people of this company need effective leadership.  let’s hope they have it.

  • Anonymous

    Another thought to ponder. Why is it that a billionaire six times over seeks financing   for  100 mil?  Has Ira ever played ball with any of his own money? Or has it always been with other peoples? Is this how he amassed his fortune, by insulating himself   from any potential losses by never using any of his own personal wealth? What gives? Does anybody have any insight into this? On the surface, and most likely straight to the core, this appears to epitomize the rampant, out of control corporate greed that is bringing this great nation to it’s knees !

  • MTE-OHIO

    BOF boy you need to quit whining. Since you have some time on your hands now, you should e-mail the great leader at district 1 and see if you get a reply. Idoubt he has the balls to answer you. He has destroyed the Ohio Valley plants, particularly Mingo. McCall let Severstal off the hook when he didn’t pursue the grieviance that was filed. I doubt that it ever was filed. No one at the local or international level when questioned about it ever had an answer. This inaction led to Severstal-Columbus obtaining orders in markets they never had before due to our so-called reps sitting on their fat-asses and doing nothing as usual. The business plan R-G steel had was a failure from the onset, too much overhead with no customers. Rennert was ill-advised to start up a giant money pit without sales to support it. Mingo was the best option and still is even though you boys don’t want to believe it. Bigger is better sure as hell backfired on him as he threw most of the money down the drain.

    • USWhasafewscabs

      Severstal most likely kicked some clams McCall’s way and the Columbus grievance mysteriously vanished. I  asked the horse-faced  jackass about it last April at his Mingo pow wow and he said it was still active. Active where?? The two faced traitor doesn’t even show his face when there is a crisis like this. I would expect as little from a  loser like him. Piss on him and the USW. Worthless, useless representation.

  • MOE MOE

    BOTTOM  LINE…..IF   THE  PLANT…..PLANTS   COULD  BE  MAKEING   MONEY

    THEY  WOULD   BE   DOING   IT…..PROUBLEM  IS   THE   WHOLE  ECONOME   IS 

    SILL  FUCKED  UP……THANK  OBAMA   AND   OUR  GOVERMENT   FOT   THAT

                           MOE    MOE

    • Guest

      if you want to see what is in our citizens future jus t take a look south at what political corruption has done to mexico.  are there any similarities in what is evolving in this country

  • RealSteelworker

    Pick up the December 24 – 25 Weekend , 2011 Wall Street
    Journal and read: Steel Prices Shine Lifting U.S. Makers in the second section
    above the fold about how all the other mills are looking to have a good year
    and the investments they are making to their plants. Why isn’t RG Steel in the
    article? That reason would be poor management and the USW in bed with them,
    working to screw the union members by making bad decisions. They tried to make
    a bunch of steel and did not have the customers to ship it to. Instead of
    running the smaller mills to get the orders back before starting the big mill
    that is so expensive in startup cost alone. This is why RG employees are on the
    street when the other mills are doing well.

    • The Ghost of Gulf States

      WSJ is always about two months behind on their news and tends to listen to the paid flacks at the mill, or the mill’s favorite analyst, Michelle Applebaum.  The mills have not reported good quarterly results, hence the reason they’ve pushed the HR and CR bases up $100/ton recently.  The demand is not there and they’re likely creating a bubble that will soon burst, especially with all the new capacity coming on.  Unless the economy stages a miraculous recovery, prices will probably collapse again.  So no one’s doing particularly well.  Even so, RG is not a name associated with high quality or excellent delivery, and your costs are far too high.  Despite having some pretty good product managers and salespeople, they just don’t have a lot to work with at the moment.  They’ve had to resort to selling 2-3% below the rest of the mills.  So your future looks a lot like Huntco, Geneva, and…Gulf States.  Do not get caught waiting around for this thing to come back rather follow the good advice someone posted yesterday: be willing to retrain, look outside your comfort zone for work, and give up your misplaced faith in the union to take care of you.  Your leadership is just like most politicians, only out for themselves.

      • Mtngirl

        Our (WCI) on time delivery rate is pretty good, our quality is pretty good, you are right about niche and high carbon steel. What you don’t know is we have several customers who place big orders every month. These customers were ran off when Severstal tried to turn us into a tin mill (mistake). These same customers came running back when RG took over and started making these products again. I think WCI will survive, We have been making money since we started back up.  I just don’t know what will happen to Rg Steel, He shouldn’t have let SP suck the company as far into the hole as he did. You guys keep bad mouthing Ira, Seems you guys forgot you were shut down and he restarted SP, He at least gave you guys a chance, sorry you blew it. Ira owned WCI for 18 years before the bankruptcy, we always worked, we made money, he ran into trouble when everybody started dumping their cheap steel into this country.

        • guest9999

          I will be interested in seeing where Warren is at the end of 2012, if RG survives.  Your profitability is tied directly to your iron ore deal period. You have a pellet deal that expires at the end of’ ’12, then you will be forced to buy on the open market as Sparrows was.  When the deal is done, and your advantage is gone, do you think $125 million will be spent to reline and repair your furnace? Everybody thinks their plant is the best, invincible, and something that any company can’t do without. Every hot end we have has been down for periods of time. When Severstal put the three plants together, Warren was said to be the worst, oldest and least likely to run. The pellet deal was discovered, and like magic perceptions changed. If you ask people at Mingo, Warren, and Sparrows each will say theirs is the best option. Truth is each is just a part of the over capacity and outdated equipment that plagues the steel mills in the northeast. We are all expendable, all fighting for jobs. Truth is the industry does not need RG,  the employees do.

          • The Ghost of Gulf States

            Guest 9999, your last sentence is probably one of the best I’ve read here.  It’s absolutely true and gets right to the heart of things.  As for iron ore, there are integrated mills than can survive during periods of buying on spot.  In Warren’s case, a good deal just masks the other cost issues.  And other mills are making products that are beginning to infringe on their niche markets; it’s similar to what’s happening to rerollers like Blair and Stripco.  Customers are looking to find less expensive alternatives and the mills are stepping up what they’ll produce in the face of all this new overcapacity.

            WCI is running with some of the same equipment we had in Gadsden and I believe I was told most was installed in the mid-50′s.  Republic did more upgrades in Warren, so they’ve been able to soldier on longer.  Even after spending $25-30 million with Davy, the hot strip mill could manage only half-standard on gauge and we were still producing less than 500 piw coil because there wasn’t enough money for a new reheat furnace.  That was another case of management and union being locked in a death spiral.  Money should have been pumped into the discrete plate side of the business but the USW didn’t want it because it would’ve only kept about 25% of the employees working and management knew their hands were tied permanently by that.  Most of the leadership on both sides were sheet mill guys anyway.  I was there at the bitter end, listening to the typical union line: “There are two sets of books, we’ve always made money, they’re just trying to break us, we’ll never shut down and, if we do, someone else will want this place.”  Chapter 11 came shortly after, immediately followed by Chapter 7.  Today, the hot strip mill, plate mill, and caster are operating somewhere in mainland China.  The coke batteries, blast furnaces, BOF shop, soaking pits, and blooming mill are all gone to someone’s QBOP, BOF, or EAF, leaving behind a big Superfund site with about 100 years of slag leaking arsenic and who knows what else into the Coosa.

          • Wci8757

            warren was said to be the worst,oldest and least likely to run.. well it looks like  they were wrong because warren is running. 125 million to reline the blast furnace. were did you get that figure at, the superintendent of the blast furnace was sent to china recently to view a new way of relining a blast furnace that bought the cost down considerately. will warren still be here at the end of 2012 who knows if any one of use will be here at the end of 2012 hell we might all be dead by that time.

        • All In this together

          We didnt “blow”anything.Lets see no raw materials on the ground.Severstal didnt give a shit when they took the L down.Its not our fault that Severstal ran the Point bare bones…..Its not our fault that we had to supply Severstal with their Blood  Steel at below cost.Its not our fault that Ira rushed the L back up.Its not our fault that Goodwin lured custermors back with below cost pricing.The workforce at the Point im sure for the most part is just like the Ohio Valley Plants wanting to do a good job.Given the tools and the cooperation we can succeed.We were shut down so that Columbus and Dearborn could have full order books.Severstal refused to sell us raw materials from one of their mines at cost which would’ve made us cost competitive with almost all the mills.We to had loyal customers that were either syphoned away or just plain out ran off.We had a great export buisness going that Severstal  refused to entertain.We were just starting to recover that buisness now that RG has taken over.

          • warpig

            i believe that severstal was going to run SP and maybe put a few bucks in her to keep the old girl running , but the union leaders played hardball with em for to long and with severstal not used to hearing the word NO, decided to rape her of its materials customers and all it could get. i think the people who lost the most were shareholders and the three plants. Severstal has invested over half a billion into Dearborn not long after he raped SP.

      • Aynrand0202

        hey, Michelle is not the mills’ favorite steel analyst, she is EVERYONE’S favorite steel analyst! 

  • The Ghost of Gulf States

    Interesting, reading all the comments here about the union, brotherhood, grievances, and so on.  They go hand in hand with the comments about unemployment and layoffs.  The steelworkers in Hertford County, Berkeley, Butler, Ghent, Decatur, Calvert, Tuscaloosa, Columbus…they don’t worry about that much.  And they make a lot more on average than you boys do….

    • Only a tornado away

      And do you think that they would have the pay and benefits they have without the union movement in this country.You are kidding yourself if you think that Alexi and Sergi are kind hearted.Columbus wouldnt of had a full order book in 09thru the sale toRG Steel in March of 2011.They striped the Ohio Valley plants and Sparrows Point of their orders and the claimed economic factors.The only factors in play were they needed orders to justify the expansion at Columbus.The Russians are the ultimate bottom line players.May the sun always shine in Mississippi because you have only seen the smiling side of Alexi.

      • The Ghost of Gulf States

        These rants just show how little the average USW member knows of anything outside their doors.  First of all, Columbus isn’t competing against the other Severstal or RG mills for customers or employees.  Modern steel sales is all about logistics and delivery.  Dearborn, for instance, can’t touch Columbus for on-time; the internal numbers get manipulated, especially where the USW is involved, so ask the customers: Columbus is superior.  And Decatur is better than Columbus.  Then there’s logistics, which contributes to the delivery issues – most of the Columbus customers are in their backyard and the numbers are growing.  Columbus and Decatur and Calvert don’t provide excellent benefits because they’ve been coerced by the local, or because past history says they have to – they do it because they’re competing with Boeing, United Space Alliance, Austal, Toyota, Mercedes, Volkswagen, Nissan, Hyundai, Kia, Steelcase, Honda, Thomas & Betts, Intergraph, Navistar, Paccar for employees.  We don’t have the high unemployment rates here and jobs requiring skilled, motivated employees are not always easy to fill.  You and thread are just looking for excuses, and USW and Willow just name-call because they don’t want to hear the truth.  I’ve been listening to USW rhetoric for more than two decades and all the knotheads do is talk all of you further into decline.  Mordashev cares about making money and I doubt he’s ever smiled at an employee; Lakshmi Mittal seems to have a reputation for lopping off heads whenever managers disappoint him.  It’s all about education, hard-work, and flexibility.  I know from talking to former steelworkers at our mill, they’re much happier working for Honda or Nucor and are usually the most vocal against the USW and UAW when those outfits show up on the doorstep.  Sparrows Point is probably finished, and WCI is close on its heels.   If it weren’t for high-carbon and some other niche products, they probably wouldn’t have made it this long.

        • USWhasafewscabs

          We could care less about your production numbers. This is about us and the situation we find ourselves in at the moment. There will always be better places to work just like there will always be worse places to work.

          • The Ghost of Gulf States

            There aren’t many jobs in the steel industry that could be worse than Sparrows Point or RG Steel.  And the “us” you’re referring to is in this situation because they will not listen and will not change.  The USW is not your friend and protector and it’s leaders are more interested in their own bottom line and the politics (reminds me of the NCAA).  The old union model is essentially dead and, following the failed attempts to organize plants in the South, they’ve also failed at the new strategy of organizing among immigrants and illegals.  There are estimates that the USW cost the state of Alabama over 3000 jobs in the late 90′s with their hardheaded, outdated tactics at Speedrack, Scottsboro Aluminum, Butler Buildings, Goodyear, Gulf States and about a half-dozen other places.  And even though it’s not as bad today as it was at the mill I worked for (you didn’t have to go far to find someone asleep in the back of a pulpit or some 20 year-old who got their job through an uncle’s USW connection), organized mills still have much lower production rates than non-union.  It comes down to what I said before: if you’re a skilled, hard worker at one of these three mills, get some additional training and be willing to look elsewhere for work or be willing to find something outside of this business.  It’s out there.  Recently I met a guy in the hot strip mill at Calvert that relocated from Sault Ste. Marie and he was loving the new, different work environment and living on the Gulf Coast.  And there’s another advantage of the non-union mills: they’re getting the cream of the employees from the old-line integrated companies, depriving them of their best, motivated, and hard-working employees.

            But instead, the cycle continues and most here will continue to trot out the tired old USW rhetoric.  I saw it back when RG was taking over (especially here) and I saw it back when ISG was starting: the owners are greedy crooks, the bosses are incompetent crooks, our leaders are ignorant crooks, life is unfair, stick together brothers so we can all fail together yet again.  Most of you are so steeped in this stuff that you can’t see how warped and outdated that thinking has become.  Even worse, you’ve lost one of your best excuses: there ain’t no “furrin’” steel coming into the ports and we haven’t seen significant imports in years! 

          • Wci8757

            well ghost it seems you have all the answers. run for president, hell i would vote for you.

          • warpig

            gotta agree unions are on their way out thats for sure

        • hanging on by a thread

          Ghost , contrary to some of the things you may have been told by those former steelworkers. There are plenty of well educated , worldly men and women who work in these mills. now long ago its true there were many steelworkers that were immigrants  with little or no formal education. BUT make no mistake, these workers knew how to do their job. They worked hard for poor pay ,and unsafe working conditions. So HOW dare you sit there own the throne you built thru your own narcissistic , bigheaded ego and judge any of us. We may sit here and bicker and piss and moan, but the one thing we are is union!!! The point warren and the ohio valley are all on the same team, it’s not our fault they keep changing the f**king game. I’ve only seen you on here talking shit on the rest of us when there are known struggles in which we are going thru. Like back at contract time and now. I truly believe you are either a company plant or just some jack off who wants to put his spoon into our pot of problems and stir. Remember this all those companies you mentioned got where they are because of people like us, and not in spite of us

          • The Ghost of Gulf States

            I’ve been to your mills and seen the people, sat in the outfield at Camden Yards with them once or twice, and know there are good people there.   I’ve been through the struggles, too (pretty sure I mentioned that).  I just hope some of those good people have the sense to ignore and reject all the USW BS you and others like you continue to spout in the face of all the obvious evidence to the contrary.  The economics of the three mills making up RG don’t make sense to begin with, especially the hot end at SP.  Adding USW representation just exascerbates the situation.  SP has the reputation of having the most hardheaded local of all and the state of Maryland’s reputation for liberal politics and regulation don’t help either.  It makes a lot more sense to import slabs at SP but Severstal’s management was under constant criticism from the USW for that – might as well let everyone be unemployed if we can’t all be employed, right?  The USW and the steelworkers that continue to listen to their rhetoric are dinosaurs and you’re headed for the same fate as our old facility.

          • Wci8757

            by any chance do you know casper the friendly ghost.

          • warpig

            from what i understand severstal brought in slabs to SP. and that cheap steel would crack, peel and all kinds of stuff. Guess that crummy steel can only run in Russia . 

        • Facts dont Lie

          Its a facts that Columbus has a sweet heart deal for electric.Its a fact that in late 09 and early 10 Columbus order book was not even half full.Its a fact that Severstal refused to sell the “Point” raw materials at cost from their mines.Its a fact that if they would’ve did that the “Point”would’ve been competitive with their competitors.Its a fact that after that refusal our orders were drained away.Its a fact at the same time Columbus order book suddenly filled up.Its a fact that Severstal strung these plants along for two years while they got Columbus up to speed.Its a fact that while they strung these plants along Severstal did everything they could to insure that whoever tried to refire the L Furnace would have a costly and hard time of it.ISG made money at the “Point”,Mittal treid to use the “Point as a swing mill and Severstal instituted a slash and burn strategey of slash and burn.And to top it off Alexi demanded “Blood Steel” for Columbus and Dearborn.While at one time the “Point”may have been bloated it is now down to bare bones manning wise.Its a fact given access to a supply of raw materials and a commitment to run the L how it should be run we may  not be the best but we will give them a run for their money.One More fact Ghost location may be everything……but it can also be problematic.Mississippi has been having historic flooding lately as last years flooding showed.And by the way who picked up the slack then?Oh thats right it was the”Point”.One last fact.Why do you think that Alexi and Sergi went thru plant managers at the “Point” so fast until they came up with their yes man Howard.Anyone who dared tell them that they were wrong or stood up to them was shipped out.Be careful who you get into bed with.

          • Wci8757

            you forgot to add one think. they tapped danced all over mccalls head.

          • observer

            Sounds like  Alexi really pulled one over on Ira doesnt it???

    • USWhasafewscabs

      Who cares !

    • Willow

      do us all a favor and keep your scabby self off of this site!

  • hanging on by a thread

    ghost, if they make more it’s because of all the men and women who bled and sweated thru tough times way back when for them to

  • banjo

    The government loan Severstal got this past summer was for 730 million, and not thousand. My mistake.

  • HarryReems

    Severstal refusing to sell iron ore at cost instead of the market price?

    If your plant loses money if it has to buy iron ore at the market price then YOUR PLANT IS A MONEY LOSER.  Why should Severstal have taken valuable iron ore and sent it to you so that you could diminish its economic value?  Makes no sense.

    You were asking the iron mine to subsidize your operation.  Ain’t gonna wor.

    • The Ghost of Gulf States

      Huntco tried a similar tactic (briefly) by providing material off their Arkansas cold mill to their service center branches at cost.  Shortly after, they threw in their lot with Enron, and we all know how that turned out.  Again, the ore argument is just a smokescreen to cloud the bigger issues.  If it weren’t ore, there would be crying about scrap or coke or energy or something else.

    • warpig

      raw materials take up a very large piece of the pie on cost per ton to make steel. look in the steel news web sites. AK, US mittal buying up mines all the time. Our wages is the smallest piece of that pie. Think plants lose money because of poor planning and managements running of those plants . They need to take a little more input from its workers to help them run the plants.

    • Selling at a Loss

      All the while we were selling slabs and coils to Dearborn and Columbus at cost while Severstal owned the Point.Cant have it both ways Harry……. its a game Harry………Bethelehem supplied Burns Harbor at below cost from the Point …….showed a profit there a loss at the Point.Severstal did essential the same thing.As to one division of a corparation subsidizing another its done all the time.Its only when you sell at a loss you get into trouble.As to costs for manpower at the Point it is competitive with almost every other steel mill in the US……Union and non union………. 

  • Jason

    The union has done a very poor job of informing their members whats going on. The one thing the salary people and union officials have in common is they all still have jobs. 

  • SPPT Refugee

    Boy am I glad I got the heck out of there.  I tried to warn as many people as I could before I left that it could not and would not hold together.  The orders were drying up, the prices were falling, and the mill was making the same silly moves that it had been for as long as I was there and coming up with some new ones to boot. 

    There are some great people still left at the point and I hope that they land on their feet.

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    • Last Thursday, I sent an email to the Mayor’s Office of Communications asking for some basic responsiveness: Please return our emailed queries and phone calls about stories. Please send us the same routine emails you send to other members of the media. Lately, more so than usual, they haven’t been. It’s a shame because, even [...]

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