CAMPBELL Ex-employees at Cold Metal favor ESOP plan

The workers' consultant said he thinks the plant could employ more than 50 of the 116 workers who lost their jobs.
THE VINDICATOR, YOUNGSTOWN, OHIO
By DON SHILLING
VINDICATOR BUSINESS EDITOR
CAMPBELL, Ohio -- Steve Rovnak is ready to start truck-driving school next month as his unemployment compensation nears its end.
He's hopeful, however, that he can shelve those plans and return to work at Cold Metal Products' Campbell plant, which closed in August.
About 70 workers unanimously approved a plan Wednesday to try to reopen the plant with an employee stock ownership plan coupled with outside investors.
"I'd go back for sure," said Rovnak, 47, of Boardman. "You can't find anything out there."
Rovnak, who worked eight years at the plant, said he'd be willing to take the 15 percent cut in pay estimated by a union consultant.
The only suitable jobs he's found in classified ads pay between $8 and $9 an hour. The average pay at the Cold Metal plant was $19.
James Touville, 57, of Petersburg, said he supported the ESOP plan even though he applied for retirement benefits when the plant closed. He worked 36 years there.
"I spent my life working here. Sure, I'd like to go back and work a couple more years," he said.
Good news, bad news
Bob Boak, president of United Steelworkers of America Local 3047, said the workers' consultant, Harry Kokkinis, presented a complete picture for workers during a meeting at Roosevelt Park.
The good news is that Kokkinis thinks the plant can operate successfully and could employ more than 50 of the 116 workers who lost their jobs.
The bad news is that the pay will be less and the jobs will have different work rules.
"This will be a start-up company," Boak said.
The vote by the workers included hourly and salaried former employees. Drew Munera, former plant manager, is involved in the effort to restart the plant.
Boak said the vote wasn't legally binding but was recommended by Kokkinis to make sure everyone understood what was happening.
The ownership structure is yet to be decided, but the New York consultant said the ESOP might receive a minority ownership stake and acquire a majority share later.
Kokkinis has a month to put together a new company because the plant's machinery is set to be sold in bankruptcy court Jan. 21. The deal can't work without acquiring that machinery, he said.
"There is a real place for this business in the marketplace. The question is whether there is time to get it done," he said.
Interested investors
Kokkinis said he has spoken with investors who are interested in backing the ESOP and will be seeking commitments from them. He is looking for about $2 million in investments and about $6 million to $8 million in loans to get the plant restarted.
Included in the plan is about $2.5 million improvements to the plant, including new furnaces and upgrades to the rolling mill.
Kokkinis said the plant failed under Cold Metal because of a lack of investment.
Rather than upgrade the Campbell plant, which used to be the heart of the company, Cold Metal instead spent $25 million in 1997 to turn a small service center in Ottawa, Ohio, into a rolling mill that could cut steel into wide widths.
The Campbell plant handled specialty products that required steel to be cut to exact specifications.
Because of these requirements, the Campbell operation desperately needed an upgraded rolling mill, which was operating with computer controls from the 1970s, Kokkinis said. Newer technology would upgrade the quality of the products, he said.
Another problem was that utility bills were too high because of antiquated furnaces, he said. The furnaces also date back to the 1970s, although they were installed on foundations from the 1940s.
Couldn't finance plan
Cold Metal had developed a plan to upgrade the Campbell plant but waited too long and couldn't secure financing because of its financial problems, Kokkinis said. The company, which operates plants in other areas, filed for bankruptcy protection in August.
If new operators can upgrade the Campbell plant's equipment, the company can succeed, Kokkinis said.
The processing of steel for saw blades will be an important part of the plant's future, he said.
About a year before the plant closed, Cold Metal moved edge conditioning machines from another plant to the Campbell plant. This equipment prepares the edge of steel so saw teeth can be attached.
Kokkinis said Cold Metal customers told him they were impressed with the plant's quality and said it was immediately better than the quality they received from Cold Metal's former plant in Connecticut. Saw blades are a growing and profitable business, he said.
In total, all but one of the plant's top 25 customers said they would be willing to do business with new operators, he said.
Kokkinis thinks the plant can ship 800 to 900s tons a month in the first year, which would allow it to be profitable. Cold Metal had been shipping 1,500 tons a month.
shilling@vindy.com