Severstal to idle plant for March

PITTSBURGH - Local United Steelworkers officials have been told to expect the shutdown of the Severstal Wheeling plant stretching from Steubenville to Mingo Junction for the entire month of March, affecting about 1,100 union positions and an unavailable number of salaried workers.

Severstal confirmed Friday that it's restarting its massive blast furnace at Sparrows Point, Md., and will be taking the company's electric arc furnace at Mingo Junction, the last steelmaking furnace in the area, off line. A Severstal spokesman with New York public relations firm Taylor-Rafferty said the shutdown would come in early to mid-February.

However, Ken Aspenleiter, president of USW Local 1190 at Steubenville, said the order book has picked up and he anticipates there will be enough work to carry the plant through February. He said the latest word he has from the company is the shutdown will come in March. Aspenleiter has been in Pittsburgh through the week working on contract talks with Severstal.

The shutdown is expected to be temporary, union and company officials have said.

The public relations spokesman said he could not provide numbers to be laid off nor an exact date for the shutdown.

The removal of the arc furnace, just five years old and considered by previous company leadership as a centerpiece of the former Wheeling-Pittsburgh Steel mill's survival after emerging from bankruptcy in 2003, means the plant won't need to run its continuous steel slab caster, either. The plant's 80-inch hot strip mill which converts the slabs to coils, will be taken out of service in March, too, Aspenleiter said.

"The way things have been going on in our economy, this was not a complete surprise," Aspenleiter said. "I'm disappointed that I just found this out within the last two days and it just shows what a sad state the American steel industry is in, when you can have a facility such as our EAF in Mingo Junction and the Wheeling-Nisshin plant across the river - two of the industry's most modern facilities - negatively impacted and shut down for a period of time."

Wheeling-Nisshin was a joint venture of the former Wheeling-Pittsburgh Steel Corp. until it was sold entirely to Japan's Nisshin Steel in March 2008 when Wheeling-Pitt needed capital under former owner Esmark Inc. The Follansbee W-N coating mill cut its work force in half - the first layoff in its 20 years of operation - in December.

The EAF was built with a combination of federal and state loan guarantees when Wheeling-Pitt emerged from its second bankruptcy in 20 years in 2003. The furnace has not operated to its full capacity of about 2.4 million tons a year.

Russia's Severstal, which bought Wheeling-Pitt and changed its name to Severstal Wheeling when it bought Esmark in August, went ahead with a previously planned outage of the Mingo Junction blast furnace and basic oxygen steelmaking furnace with intent to turn them back on in September. With the downturn in the economy, the furnaces remained cold and workers at Severstal Wheeling have been working on a week-to-week basis filling orders since October. Layoffs have been in the hundreds.

Aspenleiter said a complete shutdown of the Steubenville and Mingo Junction works would affect about 1,100 workers.

"It also affects the corresponding towns they live in with less revenue coming in to them," Aspenleiter said. "As far as the union goes, we're always open to discussions about a way to try to turn this thing around, to keep our facilities viable and we're looking forward to working with Severstal to make this happen.

"One of their officials gave a quote about a month ago that they didn't buy these facilities to shut them down, and that's what we're going to hold them to," Aspenleiter said.

The public relations agency would not comment about the rationale behind the planned shutdown and the restart of the Maryland blast furnace. The furnace there recently was refurbished and is about 2.5 times larger than the idled Mingo Junction furnace. Sources in the company say that Severstal has paid for iron ore that it is storing and it would make sense to use the ore before buying more raw materials. With scrap prices low, the EAF could be a cost efficient way to make steel when iron ore and other feedstocks for ironmaking in the blast furnaces are used up. The EAF can be fed with scrap steel or iron from a blast furnace to make more steel.

Aspenleiter said plans now call for a slow return to production in April and May, depending on the state of the economy. He said the Steelworkers plan to continue to push the Obama administration to require the use of American steel in any infrastructure projects that result from the economic stimulus plans under discussion in Congress.

"It's about time Americans started taking care of Americans," Aspenleiter said.

Contract talks have been under way with Severstal since the current contract for Severstal Wheeling expired in November. Aspenleiter said Friday the talks were entering a break for the weekend but will resume on Monday.

We'll be there until we're done," he said. Aspenleiter said the union is maintaining its stand for a contract with Severstal that will follow the patterns set by the industry in contracts last year with ArcelorMittal and U.S. Steel. Those contracts were negotiated when steel was experiencing a boom time in early to mid-2008.