Who is Renco?

STEUBENVILLE – The Renco Group is a multibillion-dollar holding company owned by the family of Ira Rennert, who is described as publicity shy, a donor to Jewish causes and owner of one of the largest American homes in history.

Through a variety of publications, a picture emerges of Rennert and his Renco Group as a firm that has built and partially rebuilt itself in a variety industries, some of which, like steel, offer the potential for good wages to communities at the expense of potential environmental problems. Many of its investments come by buying formerly bankrupt companies or companies that are among the last in their respective industries in the United States. It’s a company where hundreds of millions of dollars are spent routinely on acquisitions.

Rennert is 76 years old and has made his living off investments for the last 50 years or so. He denies reports that he ran afoul of the National Association of Securities Dealers in the early 1960s when he was working at his own firm in Manhattan, but he’s made his living in private investments since then, according to BusinessWeek.

Renco dates to 1975, and, according to its own publicity on its website, has completed more than 40 acquisitions and continues to pursue new opportunities, such as Wednesday’s announcement of the $1.2 billion purchase of Severstal Wheeling, Severstal Warren and Severstal’s Sparrows Point, Md., steel mill to create the fourth-largest U.S. maker of flat-rolled steels.

The purchase includes payments, according to Severstal, of $125 million in cash, $100 million in secured notes and the repayment of $317 million in third-party debt at the closing of the deal, in addition to employee and environmental costs of about $650 million. The deal includes the Warren, Wheeling-Pitt and Sparrows properties, Wheeling Corrugating, Allenport mill and 50-percent interest in the Mountain State Carbon coke plant at Follansbee and Ohio Coatings at Yorkville.

Renco’s purchases

Renco began by acquiring Consolidated Sewing Machine Corp. in 1976. It acquired King’s Jewelry, the Wheeling-founded firm, in 1981, subsequently moving its headquarters to New Castle, Pa. What is now U.S. Magnesium came in 1989. AM General, the maker of the military Humvee, was bought from LTV in 1992, four years after it acquired LTV’s Warren steel mill. It got into lead production and recycling with the purchase of St. Joe Mineral in 1994, now called the Doe Run Co., with a subsidiary in Peru and bought the interior and vehicle hardware unit of Delphi Corp. out of that firm’s bankruptcy in 2008, renaming it Inteva Products. It also lists Unarco, a maker of warehouse pallet racks and rack-type shelving systems for major retailers including Wal-Mart, Lowe’s and many others, among its companies.

Renco had 59 locations in the United States before buying the mills, as well as units in Brazil, Europe, South Africa, South Korea, China and Japan, among others. The headquarters of Renco is in New York. The headquarters of the new RG Steel company will be outside Baltimore at the Sparrows Point mill.

Rennert himself was listed at 58th on the Forbes 400 Richest Americans list, with a net worth as of September of $4.5 billion. He is credited with launching the ultra-luxury SUV market through the Hummer production by AM General, which eventually sold civilian Hummer production to GM, which since ceased the production. Forbes said he gives regularly to Jewish causes.

Metals and minerals

Renco bought WCI from bankrupt LTV Steel in 1988 for $140 million. BusinessWeek said Rennert turned around the company through $250 million in junk bonds.

Renco was on a buying spree through the 1990s, buying AM General in 1992 for $133 million, also from LTV, and used junk bonds to buy St. Joe Mineral and create Doe Run in 1994. Unarco came in 1995, the Peruvian unit of Doe Run in 1996 and a Peruvian copper mine in 1997.

After the turn of the 21st century, the junk bond financing began to lead to financial troubles, with a Kentucky coal mining operation, WCI Steel and Magcorp all going into bankruptcy, though there are accusations in some reports that Magcorp went bankrupt to avoid liabilities in environmental cases relating to its operations at the Great Salt Lake in Utah. The company said its filing had to do with pressures created in the magnesium market by unfair imports. It reorganized Magcorp and came out of bankruptcy as U.S. Magnesium. It is listed in many reports as the largest North American primary magnesium producer and one of but a few outside of China. Magnesium is vital in automotive, aerospace and the metals industries.

In the case of WCI, Renco was facing potential action by the Department of Justice to put liens on Rennert’s massive home and Fair Field estate in the Hamptons, which also wanted the sale of WCI to new owners not to push the costs of unfunded Steelworkers pensions off on the Pension Benefit Guaranty Corp. Renco agreed to cover pensions after it no longer owned WCI and the new owners also agreed to contribute.


Renco and Rennert apparently can be polarizing.

Involved in industries such as lead, mining, magnesium and steel, the companies Renco owns often face major environmental issues. Lawsuits and consent decrees follow Doe Run from its Missouri operations to its smelter in La Oroya, Peru. A New York Times profile there from 2009 reveals a town split between knowing it’s got health problems with children carrying high levels of lead in their systems, but good jobs at the smelter.

Doe Run has installed sulfur dioxide controls at the Peruvian plant. Facing environmental enforcement issues at its lead operations in Missouri, it has said it will close its smelter, the last primary lead production facility in the U.S., at Herculaneum, Mo., by the end of 2013. Doe Run also has said it’s spent more than $30 million on a new method for producing lead from ore that doesn’t involve heat and reduces 99 percent of the contaminant pollution. The company hasn’t said if it will build a commercial scale version of its pilot plant to replace the Herculaneum smelter. The firm also has said it would consider possible reuse of the Herculaneum smelter site as a port.

The construction of Fair Field reportedly carried controversy from neighbors who fought against the massive building, fearing it could be used for purposes other than a residence. Others simply considered it a big house in the Hamptons subject to mansion envy. After it was built, the town of Southampton limited new home construction to 20,000 square feet.

A New York Times profile of Rennert and the 29-bedroom house said the billionaire said he won’t sell the house and won’t use it for anything but as a home. He also wouldn’t comment on the cost of the house or the estate, which includes 63 acres. The same article said Rennert counts among his friends Israeli President Benjamin Netanyahu.

His contribution to Jewish causes include money for Yeshiva University and the Center for Jewish History in New York, a woman’s Torah study program in Israel and an endowed chair in Judaic studies at Barnard College, according to BusinessWeek.