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Business & Developmentby Fern Shen and Mark Reutter8:35 amDec 14, 20120

Steel mill’s fate: sealed in May, delivered this week

After months of union-fed false hopes, it can no longer be denied that Sparrows Point steelmaking is over.

Above: The 4 p.m. shift leaves No. 1 clockhouse at Sparrows Point in 1956.

Some in the Baltimore area are finally coming to grips with the idea that the end has come for the iconic Sparrows Point steel mill – for decades the engine for the region’s economy as well as its cultural identity.

(Think where most of the paychecks came from to support the households presided over by those beehive-hairdo-ed “hons” who have become our city boosters’ favorite kitsch marketing meme. )

But while acceptance is healthy, the mill obituaries published in the media over the last two days are a bit out-of-date.

Events reported back in May made plain that, after years of exhibiting signs of serious institutional malaise, the steel mill had only a miniscule hope of rescue and recovery.

Many months before Wednesday’s disclosure that Nucor Corp. had purchased the only viable part of the mill and would bundle the equipment off to the South, it was evident that Sparrows Point was past the point of no return.

The Brew’s Mark Reutter – who wrote the definitive history of the mill (Making Steel: Sparrows Point and the Rise and Ruin of American Industrial Might) in 2004 – reported that this stage had been reached on May 25, shortly before parent company RG Steel declared Chapter 11 bankruptcy.

Reporting the Facts

In June, further nails were pounded into the coffin, he reported, when the bank lenders of the bankrupt company filed court papers outlining their plans to liquidate Sparrows Point.

Among the telling – and exclusive – details to emerge from Reutter’s reporting: the steel company hadn’t paid either its Baltimore County property taxes or its mammoth ($5.4 million) Baltimore City water bill, and a top Steelworkers Union official had signed papers ending all benefits and unemployment (SUB) pay for the workforce.
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MARK REUTTER’s WEBSITE has fascinating material on steel and other industries written over his long journalistic career – plus a link to his award-winning book.
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By September, the 2,500-acre facility was a ghost town and the liquidator, Hillco Industrial, was marketing the mill (or its component parts) on a kind of post-industrial Craigslist auction site, which we described in “Psst, wanna buy a steel mill?

“Rip saws, table saws, vertical bandsaws, jointer, planers, routers, drill presses, over 400 lots of of brand new and used power/hand/air tools,” it advertised. Also tendered: “Independent production lines and components.” (Actually all of this is still listed.)

Mill’s Decline Deconstructed

Perhaps the clearest explanation of what went wrong for the facility that once churned out the steel for America’s battleships, bridges and buildings can be found in Reutter’s now-seven-month-old “Six reasons why the Sparrows Point steel mill collapsed.”

In the opening paragraph, he wrote: “Barring a last-minute infusion of cash by bankers or owner Ira Rennert – or an improbable sale to a new company – RG Steel and its flagship plant, Sparrows Point, seem fated for a sad ending.”

And here’s his last sentence: “Either now or in the foreseeable future, economics will win out, and southeast Baltimore County will have to adjust to a brave new world without Sparrows.”

That analysis was occasioned by a notice issued to workers by RG Steel (the 4th ownership group since Bethlehem) that the company’s operations in Baltimore, Ohio and West Virginia would be closing, and that 2,200 employees here and 2,000 in the Midwest would be out of a job.

More than just the prelude to another ownership group stepping in, the layoffs heralded the end of steelmaking.

Still denial was widespread.

Nursing False Hopes

It was striking to hear Joe Rosel, head of Steelworkers Local 9477, tell his membership repeatedly that secret talks with buyers were – or at least could be! – taking place. (In fact, the union virtually disappeared during the bankruptcy proceedings.)

Still, Rosel’s pronouncements were echoed without question by local media outlets and nursed false hopes among workers that a white knight would ride in at the 11th hour.

It was a fallacy that we tried to counteract – here and here – all of which got us into hot water with Steelworker officialdom and its affiliated “Deniers Club.”

So the game played out for months until the grim reaper finally arrived on Wednesday, two weeks before Christmas.

 

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