The Sparrows Point steel mill’s blast furnace will be shut down through at least the middle of January due to the ongoing slide of the global economy, steelworker union representatives said this week.
The furnace, the linchpin of the plant, was shut down for a scheduled two-weeks of maintenance on Nov. 3. But United Steelworkers Local 9477 President John Cirri said plant owner OAO Severstal has decided to keep it offline until Jan. 15, with orders for steel plummeting in the face of world economic turbulence.
Cirri said approximately 140 to 160 of the plant’s 2,200 workers took voluntary layoffs announced last month. Those layoffs will continue, and Cirri said the union and plant management hope to avoid additional job cuts.
“Right now there’s some voluntary layoffs going on but no talk of involuntary layoffs,” Cirri said. “But again, the economy will dictate what happens, week to week.”
Severstal bought the Baltimore County plant earlier this year for $810 million. Last month, it said it would cut production at its U.S. plants by 30 percent and temporarily laid off 800 workers at two Ohio plants.
Severstal spokesman Michael Henson said the company “continues to balance production to meet customer demand,” but would not comment specifically on Sparrows Point or layoffs at the plant.
Cirri said the shutdown would allow for additional maintenance on the furnace, and plant workers would work in other areas and on other maintenance issues.
In a statement last month announcing the cuts to production, Severstal said it would continue to balance steel demand with workers’ needs.
“We consider these measures to be prudent management in a time of rapidly changing market conditions,” Severstal Chief Financial Officer Sergei Kuznetsov said in the statement.
The financial crisis has taken a bite out of Severstal’s billionaire owner, too. According to a report in Russian economic newspaper Kommersant, primary Severstal shareholder Alexey Mordashov has lost $16.6 billion as demand for steel has dropped off.
