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Steel Industry Uncertain in Ohio Valley

February 21, 2011

WHEELING - Mark Glyptis realizes the days of the former Weirton Steel Corp. and Wheeling-Pittsburgh Steel Corp. employing thousands of Upper Ohio Valley residents are gone.

However, with 920 workers now finishing tin at ArcelorMittal Weirton, and the possible sale of local Severstal Wheeling plants to Renco Group Inc., the heart of the local heavy steel industry still beats.

ArcelorMittal Weirton

Article Photos

Photo by Casey Junkins
Severstal North America may sell the former Wheeling-Pittsburgh Steel Corp. plants to New York City-based Renco Group Inc. Currently, the Steubenville and Mingo Junction mills are shuttered, while the Martins Ferry and Yorkville plants are working below capacity.

In the mid-1980s, Weirton Steel employed more than 14,000 people. Glyptis, president of United Steelworkers Local 2911 and former head of Weirton's now defunct Independent Steelworkers Union, knows an employment level such as that will never be approached again at the ArcelorMittal facility.

However, Glyptis stressed that the 920 employees are working to finish an average of nearly 50,000 tons of tin per month.

That's a lot of vegetable and soup cans, Glyptis noted.

Fact Box

Twenty-five years ago, the area's steel industry employed nearly 20,000 workers. Today, that number is a little more than 1,500. What is the future of the area's steel industry?

Uncertain, to say the least. About 920 workers currently finish tin at ArcelorMittal Weirton, and reports indicate Severstal Wheeling may be looking to sell its local assets to the Renco Group Inc., which would mark the company's third sale in the past five years.

The past 11 years saw many changes to the local steel industry, as the former Wheeling-Pittsburgh Steel Corp. and former Weirton Steel Corp. entered bankruptcy before being purchased by foreign companies. Here is a breakdown and timeline of major events.

  • Both steelmakers experienced heavy job losses since 2000: Severstal Wheeling now employs fewer than 750 workers, while ArcelorMittal Weirton has less than 1,000 workers. The companies had about 4,000 workers each in 2000 and about 20,000 in the mid-1980s.
  • Wheeling-Pitt started the 2000s in bankruptcy, emerging in 2003 and obtaining a $250 million loan from the government. This allowed the company to purchase an electric arc furnace for its Mingo Junction plant. The arc furnace has been a major disappointment, however, as it has never worked properly and currently sits idled, with no plans for its future.
  • Steel servicing group Esmark Inc. acquired Wheeling-Pitt through a hostile takeover in November 2007, and then sold the company to OAO Severstal in 2008 for $1.1 billion. Reports indicate Severstal currently is shopping some of its North American assets, including local plants, to potential buyers, with Renco Group Inc. at the forefront.
  • Weirton Steel also entered bankruptcy early in the 2000s before being purchased for $253 million by International Steel Group in 2004. ISG sold its holdings, including Weirton, to Mittal Steel in 2005. The company became known as ArcelorMittal in 2006. Currently, 920 workers make tin products - mainly soup, vegetable and aerosol cans - at the facility's tin mill.

"We also do some aerosol cans. We work with chrome as well. It is a good business that we have going right now," he said. "We work every day to make our operation more efficient."

Glyptis said plastic and aluminum producers are major competitors for the goods produced at Weirton, but he remains confident in ArcelorMittal's commitment to the plant.

"I am very confident in our ownership now - more confident than I have been in a long time," he noted.

Because ArcelorMittal has no intention of ever restarting Weirton's once roaring blast furnace, BOP Caster and other ends of the mill, Glyptis said the company is very interested in selling the unused property.

"ArcelorMittal has clearly stated that they are only interested in the tin facility. If it is not used to make tin, they don't want it," he emphasized.

The effort to sell some or all of the 1,700 acres of industrial property for the creation of what Glyptis terms "family-supporting jobs" is under way.

One plan to sell some of the land to a group known as Weirton Energy for construction of a coal-to-liquid fuel plant has fallen by the wayside, as that group's chief engineer, Albion Norman, was recently arrested.

"There is still a great deal of confidence that we can get good jobs to come in here," Glyptis said. "We would much rather have the mill booming, but if that's not the case, let's help revitalize the (Ohio) Valley by putting that property to some other use."

ArcelorMittal company officials did not respond to requests for comment.

Ed Bowman, a former state senator from Hancock County, spent 27 years with Weirton Steel, first as a clerk, and later in the personnel division at the mill's general offices. He recalls Weirton as one of America's last "company towns," with the mill involved in virtually every aspect of community life.

Most high school students, Bowman said, gave little thought to attending college because they knew they could secure a good job right after graduating.

"It was a very good time, no question whatsoever," Bowman said of life during Weirton Steel's heyday. "I sit back and think how we used to complain about traffic jams in our community. Frankly, I wish we had those traffic jams today."

Bowman puts "the beginning of the end" for Weirton Steel around 1979, when the company was forced to lay off more than 3,000 workers. Many affected looked at it as a paid vacation, he added, and when the unemployment benefits ran out and reality set in, it wasn't pretty.

"I saw grown, physical men come in and break down in tears," said Bowman.

Tom Zielinsky retired from Weirton Steel in 2004, following the mill's bankruptcy filing and subsequent sale to International Steel Group. During his 33-year tenure, he worked as a union laborer before rising to various management positions, eventually becoming Weirton Steel's head of information technology in 1999.

Now he serves as Hancock County's technology and communications director. Zielinsky recently wrote a book on the mill's collapse, published last year.

Zielinsky said a major factor was an "overzealous capital investment plan" following an "almost unheard of" 1984 employee buyout - often credited for saving the mill after it was abandoned by National Steel.

"We overspent 10, 15, 20 times what we should have," he said. "We started digging ourselves a slow hole, eventually to the point we couldn't get out."

Bowman recalled anger during his 1987-95 tenure as Weirton's mayor when company leaders lobbied for tax breaks - all the while receiving "substantial" pay raises, bonuses and stock options.

In the late 1990s, a spike in imports of inexpensively produced foreign steel made it all but impossible for Ohio Valley plants to compete. Weirton Steel went bankrupt in 2003, was sold to ISG in 2004 and acquired by Mittal Steel in 2005, which later became ArcelorMittal.

Severstal Wheeling

With about 1,800 local workers still out of work from the former Wheeling-Pitt mills - including those employed at the Steubenville and Mingo Junction plants, which have been shuttered since the spring of 2009 - the possible sale of the plants could breathe new life into the local steel industry.

Approximate current levels of employment at Severstal Wheeling break down as follows, according to local union leaders:

At the Mountain State Carbon coke plant in Follansbee, and at the Yorkville and Martins Ferry plants, workers are scheduled to work as orders and market conditions dictate.

Jerry Conners, who represents Yorkville plant employees as president of United Steelworkers Local 1223, said the week-to-week uncertainty can be tough to handle. He also knows it is important to keep things in perspective.

"When we look up the river and look at our brothers up in Mingo, we know we're in a much better situation than they are," he remarked.

Renco - a company whose website identifies it as having a portfolio of $5 billion, while employing more than 15,000 workers - now has the United Steelworkers right-to-bid provision to buy the plants.

Union leaders previously invoked this rule to allow Esmark to acquire Wheeling-Pitt in 2006, and also to give favor to Severstal in its bidding war for the plants against Essar Group in 2008.

Reports initially emerged last summer that Russian steelmaker Severstal wanted to sell the former Wheeling-Pitt facilities, along with operations in Warren, Ohio and Sparrows Point, Md., "as a package." Local facilities now owned by Severstal include these plants: Mountain State Carbon, which is also known as the Follansbee coke plant; Yorkville, Martins Ferry, Wheeling Corrugating in Beech Bottom, Mingo Junction and Steubenville.

Renco is a private, family-owned investment holding company that began in 1975. According to the company's website, Renco has a "long-term interest in leading companies in the mining, mineral recovery, metals production/fabrication, defense, and automotive supply industries."

The information also notes, "Our affiliated operating companies are united in their commitment to environmental responsibility, to ensuring the health and safety of their employees, and to respecting and protecting the communities in which they operate."

USW District 1 Director David McCall said this of the current state of Severstal Wheeling: "Our members and our retirees have endured tremendous uncertainty and hardship; with their continued support and solidarity, I'm confident that we will be successful in resolving the ownership issues and long term viability and sustainability of all the USW represented Severstal facilities."

Severstal spokeswoman Marika Diamond added, "Severstal has been exploring strategic alternatives for ... our assets. At this time the strategic review is ongoing and I cannot comment further. I will provide updates when appropriate."

Renco officials have to this point declined to comment on the potential purchase of the Severstal Wheeling plants.

North American Galvanizing

A bit of good news came in July of 2009 when North American Galvanizing opened a new hot-dip galvanizing facility in Benwood, with a work force of 16. The plant was acquired by Fort Worth, Texas-based AZZ Galvanizing a year later.

Plant officials predicted employment there would eventually increase to 30. That growth has yet to be realized, however, as that figure actually has dipped to 14, according to plant manager Tim Myers.

Myers said the economy and winter weather have contributed to a decline in construction projects, and thus fewer orders.

As for the future of steel in the Ohio Valley, Bowman said there's always hope for some sort of a comeback, but he doesn't believe the industry will ever rebound to match its peak years.

Diversification of industry, he said, is key for the future - but it's something Weirton could never achieve as the mill, the city's largest landowner, never showed willingness to part with any property for future development.

"We have that same problem today. No matter who owns that company, we have the same problem. ... It's been very frustrating," Bowman said.

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