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Severstal announces plans to idle WVa, Ohio plants
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By The Associated Press
| 05/07/2009 |
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CHARLESTON, W.Va. (AP) -- Russian-owned steelmaker Severstal International said Thursday it is idling mills West Virginia and Ohio because of the continuing slump in the steel industry.
About 3,100 workers at Severstal Wheeling Inc. and Severstal Warren Inc. are affected by the decision, the company said. Some already have lost jobs in earlier rounds of cutbacks, but spokeswoman Bette Kovach declined to provide a breakdown.
"Some of these are temporary layoffs and some of them are permanent," she said.
United Steelworkers spokesman Tony Montana said the layoffs are not surprising. The union represents approximately 6,000 Severstal workers in the United States.
"The USW understands that this is a matter of the global economic crisis impacting the demand for steel worldwide," he said.
Steel mills as late as last week were operating at about 42 percent capacity owing to downturns in the auto industry and other businesses that rely on steel.
"These are difficult decisions," Severstal Chief Executive Gregory Mason said in a statement. "Due to the continued deterioration of market conditions across the entire steel industry, they are necessary to ensure the long-term stability of our U.S. business."
Some operations at Wheeling and Warren already have been idled, including the temporary shutdown of galvanizing at Warren the steelmaking and hot rolling at Wheeling.
Now Severstal is cutting all remaining work at Wheeling, which has operations in Ohio, West Virginia and Pennsylvania.
"We don't know when it's going to come back into operation," she said. "We remain committed to the U.S. market and we want these facilities to be successful."
Gov. Joe Manchin called the news "heartbreaking" for workers and their families.
"We must continue to fight to keep every job, and rest assured that I will do all I can to help these workers get back to work as soon as possible," Manchin said in a statement.
He added that he would continue to explore opportunities to foster economic development in the state.
Severstal, the U.S. arm of Russian steel and mining company OAO Severstal, acquired Wheeling for $1.25 billion in cash and debt last summer, before the steel market crashed.
The industry is unlikely to see any strengthening soon, said steel analyst Charles Bradford of Bradford Research/Soleil Securities.
Speaking with The Associated Press from a steel industry conference in Phoenix, he added, "There was nobody here who saw any signs of improvement."
The mood was even gloomier at a scrap metal meeting last week in Las Vegas, Bradford said. "Boy were those guys bearish."
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©Madison Daily Leader 2009
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