WHEELING - RG Steel plans to idle its operations in Wheeling, Ohio and Maryland and warned employees Thursday to expect "a lot" of layoffs.
The decision will not affect the Mountain State Carbon coke-making facility in Follansbee, which is part of a joint venture, RG Steel spokeswoman Bette Kovach said.
Widespread layoffs, potentially even plant closings, could be ordered within the next 60 days. The company said there is "continued uncertainty" surrounding efforts to persuade lenders to loan them working capital needed to maintain operations.
The Worker Adjustment and Retraining Notification Act, or WARN, requires companies with 100 or more employees to notify their work force 60 calendar days prior to a plant closing or mass layoffs. But issuing such a notice does not mean the layoffs or plant closing will materialize.
Jerry Conners, president of the Yorkville United Steelworkers of America Local 1223, confirmed WARN letters had been issued, although he had not yet received a copy Thursday.
"I believe this is, once again, in preparation of some type of court action to come," said Conners.
Company officials said they intend to idle hot steelmaking and finishing operations at the Sparrows Point steel mill outside Baltimore as well as hot steelmaking in Warren, Ohio, and finishing operations in Wheeling, which finishes steel made in Warren.
"That's basically the company," Kovach said.
The Sparrows Point plant has about 2,000 employees. Kovach did not release figures on employment and expected layoffs in Ohio and West Virginia.
"A lot. I don't know the exact number because we will be putting the plants into asset protection," Kovach said.
Union officials have said about 700 RG Steel workers remain on the job in the Ohio Valley, less than a third of the local work force. Tony Montana, a spokesman for the USW, said the union represents about 4,000 workers at RG Steel. Half are at Sparrows Point and the remaining 2,000 are split about equally between the West Virginia and Ohio plants.
Maryland labor officials said they had been notified that layoffs would begin June 4 and run through June 18 at Sparrows Point. The Maryland Department of Labor said 1,975 employees there would be affected, 1,714 hourly and 261 salaried employees.
Kovach said earlier this week that the company is considering selling assets. The spokeswoman confirmed Monday reports that potential buyers have expressed interest in acquiring company facilities and said all options are on the table.
RG is free to negotiate a sale, but under the terms of its contract the USW has the power to halt any deal its members don't like. The USW has exercised that option in the past, backing the ill-fated Esmark over a bid from a Brazilian steelmaker in 2006, and Russia's Severstal Steel over a bid for Esmark by India's Essar in 2008, and Renco Group, RG Steel's parent company, over bids from two other companies in 2011.
Dave McCall, who chairs the USW team negotiating with RG Steel, said in a statement that the union "is continuing to work closely with RG Steel management to improve the company's liquidity during this process, and we are focused on preserving the tradition of making steel in these communities for the long term."
