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RG Steel said to be in talks with Brazil’s CSN

Some layoffs will start at Sparrows Point next week due to a sharp reduction in orders.

May 19 UPDATE: RG Steel’s Jerry Nelson says “everything’s on the table” and “people have expressed interest” in buying RG Steel plants, according to Wheeling, W.Va., newspaper. Also, scrap dealers reluctant to sell to Sparrows Point and Warren, says American Metal Market. [See AMM story below in Comments.]

Industry newsletter Steel Market Update reports that the owner of Sparrows Point has been in talks with Brazilian steelmaker CSN in an effort “to find a raw materials partner or even sell the company.”

Meanwhile, a small number of layoffs will begin at Sparrows Point next week. Informed sources report that about 35 union workers will be furloughed in the cold mill owing to a steep drop in customer orders.

RG Steel has not announced the layoffs, but they will be posted internally.

The SMU report confirmed a Brew story Monday night quoting union officials saying that RG Steel, which owns mills at Sparrows Point, Warren, Ohio, and Wheeling W.Va., is up for sale. The Brew reported that “it’s been widely rumored that [RG Steel] is seeking a buyer from overseas.”

Brew sources have also cited CSN (Companhia Siderúrgica Nacional) as a potential partner or buyer of Sparrows Point, as RG Steel faces a liquidity crisis among unpaid vendors, a downturn in orders and bank investors eager to withdraw their funds from the company.

RG Steel Says Company is Stable

The Brew’s report was met by a push-back by the company. Jerry Nelson, general manager for commercial, wrote a carefully worded statement to SMU that the company had not discussed a sale of its plants with the union, had the support of its customers and did not face an unusual problem with liquidity.

In a story today in TribToday.com in Ohio, RG Steel spokesperson Bette Kovach reiterated that RG Steel hadn’t “asked the United Steelworkers to find a buyer for its plants,” sidestepping the question of whether the company was involved directly in negotiations with one or more potential buyers.

According to unnamed sources cited in the SMU report, “CSN has not made any decisions about the RG Steel assets, which include Warren, Wheeling and Sparrows Point steel mills, or to even enter into a closer commercial relationship with RG Steel.”

Rebuffed by Union

“We were told there were various obstacles to any deal, including issues with the union which had spurned them in the past,” the newsletter added.

In 2002, following the bankruptcy of Bethlehem Steel Corp., the United Steelworkers rejected CSN’s offer to buy Sparrows Point. The plant was eventually sold to International Steel Group (ISG), which was subsequently purchased by ArcelorMittal, then Severstal, and now RG Steel.

Kovach did not immediately respond to a request for comment by The Brew. In her response to TribToday, she touted RG Steel’s “self-help internal efforts” that have reduced manufacturing costs, she said, and laid the groundwork for a positive cash flow in six months.

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  • Common Sense

    MTE—-You are correct on ALL counts.  Finally, someone has the “peaches” to stand up and say what the issues are.
     
    NO major steel company will take a sniff on this steel mill unless that happens.
     
    MTE–Your screen name should be “MR. RIGHT”
     
     
     

  • MTE

    I could go through your plantwide mechanical and electrical gangs – naming names of individuals that are over the age of 65 years of age. Yes I could do this…  In fact, I could go as far as to name names of capable younger individuals who had to vacate their position to keep a slot for one or more of these aging workers…

    There are some over 65 that can hold their own in the mills. They obviously are not who I speak of. Some are my friends and are irreplacable. The ones that I speak of are the ones that the bosses feel afraid to make do certain jobs due to the liability for the company. I’m talking about the ones that take up union positions and dissappear from the mills to do these “Union Jobs” for hours and leave their departments short handed.

    Yes, I know, these workers got screwed by the old Beth Steel that stole their pensions. You’d have to realize that Beth Steel management wasn’t the only ones to blame for it’s failures. The union and the company both lived large for years and caused it’s downfall.

    Yes I will be an older worker someday too, God willing. It would be nice to have a mill to belong to that wasn’t choked out by previously selfish, and calculating tricksters.

    Its time to step aside. Our time has come. You have not led – WE WILL!!!

    • Lmfao

      you cant lead unless you get out from under the bosses desk, and you will never leave that position. you are a pretty good leader there!

  • Bof

    once again no communication from the union!!!

  • SCREW1190

    1190 YOUR FULL OF YOURSELF I’VE WORKED A LOT I’M YOUNG AND HAVE SEEN THE OLDER GUYS IN BAD WAYS   RETIRE AND QUIT BITCHING…  AS FOR A 1190 AS A UNION GIVE ME A BREAK YOU IDIOTS BELIEVE SOMETHINGS GONNA CHANGE THE MINGO PLANT WILL NEVER RUN AGAIN AND FOR THOSE WHO BELIEVE IT WILL YOU ARE COMPLETELY DELUSIONAL… SO I HEARD MSC IS PLANNING ON IDLING THE OLD BLOCK    BAD NEWS  CAUSE IT MAY NEVER COME BACK ONLINE AGAIN EITHER .. GUESS WHAT FOLKS TIME TO FIND A JOB BE PREPARED TO GET PAID HALF OF WHAT YOUR MAKING A DO MORE WORK…. JUST A THOUGHT  MCDONALDS IS HIRING   ..BTW IM NOT GONNA CHECK YOUR COMMENTS SO DON’T WASTE YOUR TIME  I HAVE A LIFE AND IT DOESN’T INVOLVE STAYING ABREAST OF YOU IDIOTS  CRYING        ……………  THANKS 

  • Dfis

    Watch who you call a scab ….. We aren’t all bad just a few . We’re young and we just followed the old guys lead you say we’re bad but you guys paved the way .. So don’t blame us all for one persons opinion .. And i’ve worked at msc and have helped you guys not kill yourselves .. So dont blame.us all so screwuscab He got you to play his game he

    • atruefact

      if you are younger than someone layed off and you are working then screwuscab is right! 1190 reps caused all of this non union shit!

  • pastsprep

    i know that, the union is the blame ,there acting like non union, or they might not be acting, just getting ready for who ever buys it to go non union!

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