Saturday, June 2, 2012

Our Last Steelmaker Goes Bust

Going Galt In The Ohio Valley...

Steelmaker RG Steel LLC filed for Chapter 11 bankruptcy protection in Delaware on Thursday, a week after announcing it would idle factories in three states and lay off thousands of employees.

RG Steel, the nation's fourth-largest flat-rolled steel producer with about 4,000 full-time workers and annual production capacity of more than 8 million tons, was formed in March 2011 as a wholly owned subsidiary of the privately held Renco Group.

The company, based in Sparrows Point, Md., said in its filing that it has more than $1 billion in assets and $1 billion in liabilities and wants "breathing room" to pursue a sale.

It's unclear how entering bankruptcy protection will affect RG Steel's plan to lay off employees, almost 90 percent of whom are covered under a collective bargaining agreement with the United Steelworkers that expires in September 2014.

RG Steel said in court papers that its steelmaking operations are most attractive to potential purchasers as a going concern, and that a restructuring would be best for all parties, including its employees.

It said it nevertheless sent layoff notices to certain employees because of the uncertainty in the bankruptcy process and an obligation to notify workers in advance of job cuts.

Maryland labor officials said last week that the company said layoffs would occur over two weeks beginning Monday and run through June 18 at Sparrows Point. The Maryland Department of Labor said 1,975 employees would be affected -- 1,714 hourly and 261 salaried. It was not immediately clear how many workers at plants in Ohio and West Virginia could get the notices.

Herald Star
STEUBENVILLE - RG Steel has filed for Chapter 11 bankruptcy protection, just a week after warning employees that ongoing liquidity problems would bring sweeping layoffs and plant closings in Ohio, West Virginia and Maryland.

RG listed more than $1 billion in assets and liabilities in the bankruptcy petition, which was filed in Delaware.

"We have to figure out what we're going to do," United Steelworkers Union Staff Representative Santo Santoro said this morning.

"We're going to have to have some form of financing, if anybody's interested in buying us - we don't have that information yet. But whatever it takes for them to get out of bankruptcy, we'll help them out and make this a good company.

Whatever we have to do we would surely, surely look at it. We'll help them out and do whatever it takes to make it work. Our concern is to save jobs and create jobs in this valley, not to let them go away for good."

United Steelworkers Union District Director Dave McCall could not be reached for comment. Ernie Gambellin, president of USW Local 1190 in Steubenville, also was unavailable.

The filing comes just one day after RG warned workers at its Follansbee coke plant that operations at that facility would be scaled back, at least for the time being.

The coke plant is a joint operation with Severstal, the Russian steel company which had previously owned the former Wheeling-Pittsburgh Steel Corp. properties in the Ohio Valley.

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