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“We have no inkling on how it will turn out,” says steel union president

Layoffs to continue at Sparrows Point as operations wind down. Meeting closed to the media, but Brew has exclusive details.

sparrows point signs

Signs at the steel mill point to its succession of owners, from former Bethlehem Steel to current RG Steel.

Photo by: Mark Reutter

((UPDATE, 1/6: A group representing the banks that issued a $750 million credit facility to RG Steel toured the Sparrows Point mill today. The group is renegotiating the terms of the loan to the cash-strapped company. Ned Reynolds, spokesman for GE Capital, a co-agent of the facility with Wells Fargo Capital Finance, declined to comment. GE is under pressure by Maryland Gov. Martin O’Malley to ease the terms of the loan. Other lenders include Bank of America and UBS.))

The president of Sparrows Point Local 9477 told a packed audience of steelworkers late today that he had no idea how long layoffs will continue at the Baltimore County mill.

“I wish I had good news,” Jeff Mikula told more than 300 employees – many of them already laid off – at the United Steelworkers Union Hall on Dundalk Avenue, according to sources who attended the meeting, which was closed to the media.

“We have no inkling on how it will turn out,” he said, because owner RG Steel has refused to talk to the union about its liquidity problems that resulted in the unexpected suspension of the plant’s operations three days before Christmas.

RG Steel has not publicly confirmed the shutdown, but told customers this week that it hopes to resume normal operations once “issues associated with this unexpected outage” are resolved.

Those issues, The Brew has reported, involve losses of up to $1 million a day since the mill reopened last June.

The losses have resulted in the pullback of credit by a consortium of banks lead by Wells Fargo and GE Capital, plus a shortage of raw materials due to suppliers withholding shipments because of unpaid bills.

Sources tell The Brew that the company is attempting to recapitalize and tap into a $750 million revolving credit facility controlled by the banks under more favorable terms.

The company is also pressuring the union to agree to a restructuring plan that will streamline job categories and farm out more jobs to outside non-union contractors.

Mikula did not discuss the company’s restructuring efforts at the informational meeting today.

Hot-Strip Mill to Shut on Saturday

With steelmaking operations halted at 4 p.m. on December 22, Sparrows Point is currently running off its inventory of “slabs,” or semi-finished steel, in the processing mills.

On Saturday, the 68-inch hot-strip mill will close after rolling the last of the slabs into coils of raw steel. The coils will then be processed into coated, annealed and galvanized products – taking another two or three weeks – until the supply of steel is exhausted.

After that, Mikula acknowledged, no one has any idea what will happen except for the company that, he said, has refused to talk to the union about its financial plans. RG Steel is a privately-held subsidiary of the Renco Group owned by billionaire financier Ira Rennert.

More than 500 Layoffs Expected Next Week

Mikula said that Gov. Martin O’Malley and Baltimore County Executive Kevin Kamenetz have not gotten responses from RG Steel regarding their questions about the future of the mill, or the number of layoffs to be expected.

Mikula also said he could not explain why the company has not issued Worker Adjustment and Retraining Notification (WARN) notices to the workforce, as apparently required under federal law.

Messages to RG Steel spokesperson Bette Kovach from The Brew have not been answered.

Mikula also provided information on layoffs at the mill. In the last week of December, 814 union members were placed on layoff. This week, with the hot-mill returning to temporary production, there were more than 400 layoffs.

Next week Mikula said the union expects more than 500 on layoff. The USW represents about 1,800 employees.

“Is it Ever Going to End?”

The current stoppage is eerily similar to the shutdown by Severstal North America, which sold Sparrows Point to RG Steel last March.

For six months in late 2010 and early 2011, steelmaking was closed, but steel slabs – supplied by other Severstal mills – were used to meet customer orders. Sparrows Point is the only integrated steel mill in the Northeast and is one of the country’s major suppliers of tinplate and galvanized sheet steel for the container, consumer products and construction industries.

Baltimore County Executive Kamenetz today announced that the division of workforce development will host an “expo” at the union hall next Thursday (Jan. 12) to provide steelworkers with information on emergency aid for families, house foreclosure prevention, unemployment insurance and career development.

State Sen. Norman R. Stone, who attended today’s meeting, said local government is trying to help steelworkers get through another period of hardship.

Stone spoke of the Point’s succession of owners since Bethlehem Steel Corp. went bankrupt in 2001.

And he expressed a thought no doubt on many minds in the union hall: “Is it ever going to end?”

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  • Palkie2

    Back in Feb. of 2011 when Gov Walker of Wisconsin was destroying the rights of workers in that state,I saw two labor experts interviewed on CNN that made the comment, that the USW had become useless,for the rest of 2011 I saw how true those statements were.I was a proud member of the USW for 38 years,this past year has made me become ashamed of the USW.I retired on June 1st because I had become so digusted with what the USW was allowing to go on.By the way USW, thanks for giving Ira another 6 month extension on that pension contribution,I`m quite sure that I`ll never see that money,felt that way from the get go.My gut tells me that this is going to have a bad ending for everyone involved with RG steel,but after all hasn`t this become the american way, screw the workers.When this is all over I can`t wait to read about the golden parachutes that a small minority will walk away with.Good luck SP workers and Warren workers,I think you`re all going to need it.

    • Wci8757

      the international has only one concern and that is to keep them union due’s comming in at all cost. me and my lappers want to keep living a good life style and don’t you ever forget that.

  • Jason

    Where is the international on this issue. It was they who insisted all three plants be sold together knowing the result would be a loss of jobs at the point. The International United Steel workers president Leo Gerard makes $188,450 annually. Why hasn’t he showed his face in a crisis he personally caused.  The union leadership will continue to continue to make huge salaries even though their decisions cause unemployment to their members, No wonder our dues go up every year. 

    • Wci8757

      did you read what leo gerard had to say in the steelworkers magazine when severstal sold the place to r&g  every time i read it i laugh.

    • Wci8757

      the reason your union due’s goe’s up is because i have to buy more gold chains to hang around my neck. i want to look like an international playboy.

    • MTE-OHIO

      You’ve got a long wait ahead of you if you expect to hear from the international. At Mingo we have been out of work for close to three years and nobody has given a rat’s ass about that fact. Looks like it’s Sparrows Point’s turn in the barrel. Ask McCall and Cirri. Don’t worry, they won’t lose a single dime, along with all the local leaders also. You guys are just beginning to feel the pain that McCall and the rest of the corrupt bastards can inflict. But have no fear, according to Walter you guys are going to rebound and put fear into the hearts of the steel industry. What a joke!

      • Wci8757

        and georgie pordgy said they were crushing the competition,just crushing it.

    • observer

      Jason the Union is doing what it can believe it or not. The problem is the people they are dealing with. Hopefully RG is able to get the finacing they need and you guys are back up and operating. But even if that happens the place must be managed properly and the sales team find markets for your products. That is a management function, the Unions function is help you guys get a fair wage and benefits if they can, but they can’t make the company do that. good luck

    • observer

      Jason the Union is doing what it can believe it or not. The problem is the people they are dealing with. Hopefully RG is able to get the finacing they need and you guys are back up and operating. But even if that happens the place must be managed properly and the sales team find markets for your products. That is a management function, the Unions function is help you guys get a fair wage and benefits if they can, but they can’t make the company do that. good luck

    • observer

      Jason the Union is doing what it can believe it or not. The problem is the people they are dealing with. Hopefully RG is able to get the finacing they need and you guys are back up and operating. But even if that happens the place must be managed properly and the sales team find markets for your products. That is a management function, the Unions function is help you guys get a fair wage and benefits if they can, but they can’t make the company do that. good luck

    • observer

      Jason the Union is doing what it can believe it or not. The problem is the people they are dealing with. Hopefully RG is able to get the finacing they need and you guys are back up and operating. But even if that happens the place must be managed properly and the sales team find markets for your products. That is a management function, the Unions function is help you guys get a fair wage and benefits if they can, but they can’t make the company do that. good luck

  • Walter

    No wonder we are in such trouble, everyone blames the union, yet the attendance at
    the Hall was less than packed.  How are we going to have a one million man march on Washington when only 300 showed up at the Hall?  This was an important meeting, we should have had Dundalk Avenue closed due to the a traffic jam of steelworkers!

    The last time I heard the words “Revolving Credit”  was when my wife shopped at Hechts and Hutzlers Department Stores back in the early 1960′s.   GE and Wells Fargo  should start revolving some of the $ 750 million they promised us, how can we pay them back if they cut cord on us?  It takes money to make money – what is their reply to O’Malley’s request to free up some capital for us?  O’Malley should get on the phone and ask for a reply from the GE CEO one way or the other.

    At least our elected officials are going to kick tail to get us help.

    Walter

    • ironmakingsp

      Walter did you attend the morning or afternoon meeting?

    • Warpig

      300 out of 800 made the meeting huh thats not bad when you consider that the meetings usually are just alot of political bickering and posturing. You know things are bad when you get that many to show up.The union has done a good job of  making its membership feel frustrated and uncaring.                        

      Well for the good of all RG steel lets hope things get going and we can all get back to work and we can go back to bitiching about the union but at least have food on the table .

    • observer

      Yeah Walter,you’re right!! why doesn’t GE Capital want to donate even more money to a place  LOSING A MILLION A DAY ???????????

    • Palkie2

      Walter you are probably the most intriguing person that posts messages on this page.Why not give a little bio about yourself,age,time with RG and all the others,but most of all explain this tunnel vision that you appear to have explaining why you refuse to see the true picture of what is going on.Would you lend money to a company losing 1 million a day knowing that bankruptcy is in RG steel`s near future and then your return is pennies on the dollar?

  • Cancer Club Member

    Welcome to your RG WORLD HEADQUARTERS !!!! Take a look at the gateway entrance sign to RG Steel’s World Headquarters.  What do you see?  The old Bethlehem Steel sign recycled like an old Route 66 Billboard.  More tumble weeds than in a Death Valley ghost town.  Ira’s estate looks like Ladew Topiary Gardens but his World Headquarters at Sparrow Point looks like a zoning code enforcement violation for overgrown noxious weeds.   What does that tell you – think about it.

    Kamenetz  should have his inspectors issue a violation notice for this community eyesore, just as he did for the elderly lady with weeds in her front yard.

    Mark’s picture sums it up and real good – Welcome to Death Valley

    Cancer Club Member

    • TACO

      Hey Cancer Club, Ira ordered Walter & George to report to the RG sign with their weed eaters and spruce up the entrance to our World Headquarters.  By the way, the reason you have not heard from George is that he was replacing burnt out light bulbs in the giant star on L Furnace and he fell off the ladder and has been out on worker’s comp. Ira sent him a get well card.

      • Wci8757

        george fell off the ladder. i wonder how far all that shit splattered.

  • A very concerned citizen

    Where is Senator Babs Mikulski when you need her?

    I quote her words on March 2, 2011: “I am so pleased to hear RG Steel Inc., an American company, has agreed to buy the Sparrows Point mill from Severstal. This decision will save the plant and the family-wage jobs it provides. For more than 100 years, the workers at Sparrows Point have produced the steel that built America. From forging the trusses for the Golden Gate Bridge to building the ships that took America to war, no mill has played a larger role in the history of Baltimore or, indeed, this country. Throughout it all, from the boom years to the hardships of the last few decades, the workers have never flinched.”

    Where is Ben Cardin?  Maryland has two senators. Both are absent.  This should be a tell tale sign of where it is going to end. 

    • Jason

      Senator Mikulski will say anything to get elected. She hasn’t done anything for the Steelworkers except take their votes. She is silent now just cause she isn’t up for re-election.

  • Chooch2u

    There is no union at SP hasn’t been for a long time, just sellin the workers out and takin their hard earned money! That’s why I got out of that dump!

  • Steelcros

    Mark, thanks for the update regarding the Bankers tour. Maybe a resolution is near!

  • Chris

    Goes to prove that Donald Trump was right, when he said “if you owe the bank a million dollars, you have a problem.  If you owe the bank a billion dollars, the bank has a problem”. 

  • Chris

    Goes to prove that Donald Trump was right, when he said “if you owe the bank a million dollars, you have a problem.  If you owe the bank a billion dollars, the bank has a problem”. 

  • BITTER

    Theres a growing faction at MSC coke plant in support of a new union. Since the USWA refuses to represent the workers in the fashion that they are morally obligated to do, many workers have had enough. The lies, misinformation and refusal to answer questions reguarding the current state of the company which now owns us is just rediculous.The silence is deafening from the international just 40 miles away.
    We challenge anyone to defend the position of the international in all of their decisons reguarding Wheeling Pitt the last 30 years. Every single decision made has been the wrong one.Supposedly, the new union , IBBSW , negotiates as opposed to making deals, all dues money goes to the local. No political contributions. All elected positions, no appointed, like the 80 k job of contract coordinater and others. Blaming the economy is a cop out. Weirton steel is hiring, US Steel is booming along with other steel companies. Time to make a change.What have we got to lose?

    • guest9999

      While the lack of info is a valid point, and there is absolutely no reason to not keep the membership involved, your economic premise is a little off.  Weirton is hiring, but not so much because of increase in production. Their workforce, much like RG’s, is a senior workforce and  the hiring is more a restock than “boom.” US Steel still has blast furnaces down in North America, and is not running at full production. Also, I believe RG’s decision to idle SP will result in an uptick in business in Tin and Steelmaking for other companies. The country is currently only operating at about 75% of capacity for steelmaking in the US, 80 to 85% would be equal to the boom levels of 2008. Exploring other options of representation is valid, but you must look at everything. You mention just Mountain State, but what of Mingo? Do you intend to include other 1190 members as well? If not why? Exploring other options, no problem. Just make sure you know what you are doing. All positions elected sounds good, but won’t work for all positions. (Law staff and Investment Banker types)Staff Reps should be elected, and Contract Coordinators should be eliminated, but elected officials commit election fraud (ie Sparrows Point) and graft happens everywhere. An election doesn’t mean you will be free from many of the same problems you have now. One last item, if I worked at Mountain State, I would be worried about coal supply right now, and weather it will stay open because of RG’s money problems. Good luck.

    • guest9999

      While the lack of info is a valid point, and there is absolutely no reason to not keep the membership involved, your economic premise is a little off.  Weirton is hiring, but not so much because of increase in production. Their workforce, much like RG’s, is a senior workforce and  the hiring is more a restock than “boom.” US Steel still has blast furnaces down in North America, and is not running at full production. Also, I believe RG’s decision to idle SP will result in an uptick in business in Tin and Steelmaking for other companies. The country is currently only operating at about 75% of capacity for steelmaking in the US, 80 to 85% would be equal to the boom levels of 2008. Exploring other options of representation is valid, but you must look at everything. You mention just Mountain State, but what of Mingo? Do you intend to include other 1190 members as well? If not why? Exploring other options, no problem. Just make sure you know what you are doing. All positions elected sounds good, but won’t work for all positions. (Law staff and Investment Banker types)Staff Reps should be elected, and Contract Coordinators should be eliminated, but elected officials commit election fraud (ie Sparrows Point) and graft happens everywhere. An election doesn’t mean you will be free from many of the same problems you have now. One last item, if I worked at Mountain State, I would be worried about coal supply right now, and weather it will stay open because of RG’s money problems. Good luck.

    • Wci8757

      exactly what is a coordinator and what doe’s he coordinate.

  • apalledinohio

     Quote; “The company is also pressuring the union to agree to a restructuring plan  that will streamline job categories and FARM OUT more jobs to NON-UNION OUTSIDE CONTRACTORS.”
     That pretty much says it all. The company always manages to flip the script and find a way to reduce our union brothers and replace them with contractors. At the end of the day, when their j#ck-off managment team drops the ball, WE seem to pay for it.
     Typical scenario with Iras boys. Whenwill we admit that Ira and boys out smarted us again?

  • BITTER

    Yes booming may be an overstatement. US Steel is building an entire screening facility . Our workforce is as equally old but can’t retire. There is no Mingo. Most of the experienced people are gone to feed their families. It’s going on 3 years shut down.

  • Steelcros

    One positive fact is that none of the major customers have yet jumped ship. They must feel that SP will up and running sooner than later.

    • Wci8757

      one hell of a way to run a business wouldn’t you say. if you was a customer would you want to place an order not knowing if the place is even going to be there next week.

    • Walter

      Yes Steelcros, SP has a loyal customer base and will hang in as they know that the hot side will be back up soon. I am glad to see your positive post, I too feel that the Bankers will open up the flood gates on the cash they promised us.  Our leadership and local elected officials have made their point and we should be hearing the conformation of the good new soon.

    • Walter

      Yes Steelcros, SP has a loyal customer base and will hang in as they know that the hot side will be back up soon. I am glad to see your positive post, I too feel that the Bankers will open up the flood gates on the cash they promised us.  Our leadership and local elected officials have made their point and we should be hearing the conformation of the good new soon.

    • Walter

      Yes Steelcros, SP has a loyal customer base and will hang in as they know that the hot side will be back up soon. I am glad to see your positive post, I too feel that the Bankers will open up the flood gates on the cash they promised us.  Our leadership and local elected officials have made their point and we should be hearing the conformation of the good new soon.

      • Gotta Go

        You Sir, are a putz!
        floodgate, more like a doggy door.

      • Gotta Go

        You Sir, are a putz!
        floodgate, more like a doggy door.

  • DrillingForRollingOil

    Problem here is that these guys are taking absolutely the WORST course of action.  By not talking to anybody, they have spread panic out in the streets.  Suppliers who do not get their bills paid, or returned phone calls, or even the courtesy of an “F-You” are shutting them off.  At least when Bethlehem went Chapter 11, they talked to suppliers and worked with them.

    Anybody who is saying “customers are not jumping ship” is naive.  With the gang who couldn’t shoot straight running this place, no customer in his right mind would NOT be lining up an alternative source and placing those orders… NOW.

    It is going to take ALOT of money to make the suppliers whole… How RG intends to make come up with that sort of cash while it continues huge losses is a mystery.  Even if Big Boy sells off all his gold chains that’s still not going to be enough.

    And Severstal is still expecting the money that they say RG has stiffed them out of.

    I swear, Jerry Sandusky is doing a better public relations job than these guys.

  • warpig

    i would think that our sustainability coordinator  Cirri would know something or have at least said something .But i guess i am asking for to much

  • Moneyguy

    Rather amazing that people are waiting for “the bankers” to “open the floodgates” when the guy who ostensibly owns this company, who is worth several billion dollars and lives inthe biggest mansion in the United States, has put up a pittance.

    There’s a sucker born every minute and you can count those bankers among them.  If they had an ounce of sense they never would have put up money on this deal.

  • Moneyguy

    Rather amazing that people are waiting for “the bankers” to “open the floodgates” when the guy who ostensibly owns this company, who is worth several billion dollars and lives inthe biggest mansion in the United States, has put up a pittance.

    There’s a sucker born every minute and you can count those bankers among them.  If they had an ounce of sense they never would have put up money on this deal.

  • Mtngirl

    I understand your frustration, but ask yourself this question. If I owned a bussiness would I keep dumping money into it when all the employees do is bad mouth me? WCI ran good under Ira for 18 years, we always worked even when things were very slow, no lay offs. If he can get these issues resolved, if you guys can pull together and get that SP out of the red, I think you will run for a long time. If I was you I would quit biting the hand that feeds you.

  • Mtngirl

    I understand your frustration, but ask yourself this question. If I owned a bussiness would I keep dumping money into it when all the employees do is bad mouth me? WCI ran good under Ira for 18 years, we always worked even when things were very slow, no lay offs. If he can get these issues resolved, if you guys can pull together and get that SP out of the red, I think you will run for a long time. If I was you I would quit biting the hand that feeds you.

  • Dmiddleton1128

    Mtngirl ido agree !!!
    Mr. Ira is busie trying to save the mill, and I believe do right by his employees.
    No one buys a company like SP, invest millions to keep it running, just to have it fail. Meanwhile is employees do Nothing but bad mouth him, point the blaming finger at him instead of themselves.
    Mr. Ira bought this mess of a plant, not realizing I guess how bad of shap it was in, or the type of people he would have working for him.
    !!!!!!!!,……..dont be to offended gentelman, you know its true !!!!!!!!
    He is trying to save the company and you’s are robbing him blind. It’s gottin so bad that your cars are checked by security when exciting the plant. Don’t you make enought money?
    Most of you steel every week when you cash your check!!!
    I don’t no if Mr.Ira reads this paper online, but if he does take note Mr.Ira …..fix your dept. Then clean house… You have surrounded yourself with SP people who will do you in. That also includes office, white hats as well. Outside companys get away with stealing because you top head people (old Beth Steel employees) are the ones over seeing it, and getting kick backs.
    The Apple rots from the top on down.

    • Lmarkle4

       but ira was forced into all 3 mill’s by the great dave mccall it was all or none so brother ira was only interested in warren i do not know what his plans r i hope for all sakes he runs them and invests in them but my opinion and mine alone and am not being mean i think he is going to get rid of sparrows point and keep warren and wheeling running but u r right about 1 thing he has no vision on what to do because everyone he surrounded himself with r old they r 60 70 80 yrs old they r over paid ass kissers to them they have their money this is like a game to them and we brothers and sisters r the pawn’s this man is worth 5.4 billion dollars and he will not invest whats that tell u someone is getting SCREWED and it will b us he’s running his mill’s on a day to day bases not paying any bill’s that is sad for a billionaire you noy pay your bill’s and see how fast they kick u to the curb  

  • Web TMC

    ‘plus a shortage of raw materials due to suppliers withholding shipments because of unpaid bills.’ on december 24th, our company sent bpr in to yank all our product out…

  • Laxgrl98

    I think realistically Maryland doesn’t count if they can save 100 jobs in Pennsylvannia or ohio or west virginia it’s worth 1000 in Maryland.give O’malley his due he knowsImmelt and GE could give the loan but if all three are going to fail which ones get Obama electoral ground.He has Maryland, Sorry to be so cynical but every union leader knows I’m right.they will be given the line which could turn out to be true after the election we’ll spur trade but that is speculation.Problem is The point is probably the best unit but this is an election year.

  • Kevin

    Ain’t going to happen he already has 10 electoral votes from Md.immelt must get obama most bang for buck especially if they all might fail.WV and Pennslvannia are still in play 100 jobs there are worth 1500 here.O’malley is trying and might get something if Obama wins.If Md wasn’t in his back pocket we might never have shut down.the loan would have happened already .

  • Steeler

    It appears as though we Americans are experiencing the same economic turmoil here that the Russians went through during the collapse of the Soviet Union. The United States and the Miltary Industrial Complex that actually calls all of the shots and makes all of the real decisions,has vastly overextended and bankrupt our country in the pursuit of global domination by The American Empire.Game is up folks and the bottom is beginning to fall out very rapidly! This is just the beginning.

    • U812666

      i think your totaly wrong,,,what time does the steelers play this sunday?

      • warpig

        lolol the steelers are done 

  • TACO

    Well Senator Stone thanks to you and our Governor your statement of -
    “Is it ever going to end?” has finally ended with a happy ending!  We have iron making materials deliveries, given a healthy cash flow, and the good word to get back to work.  While you are working your miracles, I wish you could get the the Ravens to the Superbowl too?

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