MCDONALD STEEL Customers persuade company to keep mill open

The company is considering cuts, but officials hope to do it through attrition.
THE VINDICATOR, YOUNGSTOWN, OHIO
By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
McDONALD -- McDonald Steel has canceled plans to shut down its 8-inch mill and eliminate 27 jobs because its customers have said they don't want the closing to happen.
Spokesman Bill Farragher said several of the mill's industrial customers have agreed to order products from the 8-inch mill, even at higher prices.
"We had to raise our prices, but thank God, the customers have said they're willing to pay them. Having a domestic producer is what they're protecting," Farragher said. "Depending upon overseas suppliers is not to their liking."
The company has been forced to raise prices on its hot-rolled steel bars and shapes, he said, largely because of soaring health care costs and rising energy costs.
Plans now are to run the 8-inch mill on an as-needed basis, while the main operating unit, the larger 14-inch mill, will run daily.
Job cuts
Some positions may still be eliminated, Farragher said, but it's too soon to say how the new strategy will affect employment levels. The mill has about 160 workers.
The company is discussing the employment issue with the United Steelworkers of America and the International Brotherhood of Teamsters Local 377, which jointly represent hourly workers.
Officials hope to eliminate positions solely by attrition if possible. "We're going to try to work it out so the fewest number of people are involved," he said.
McDonald Steel announced its intention in July to close its 8-inch mill effective Monday, citing declining orders and a sluggish economy. The notice was issued 60 days before the planned closing, in compliance with federal law, but company officials said the plan would be reversed if orders picked up.
Customers
Farragher said then that the company had surveyed customers to gauge future business, and the results seemed to indicate that prospects for a sales increase were slim.
Closing the mill would have forced some customers to buy from foreign suppliers because other domestic steelmakers don't offer the unique sizes and shapes the 8-inch mill produces, Farragher said. Most of McDonald Steel's products are custom-engineered for its customers.
McDonald Steel opened in 1981 in the former U.S. Steel McDonald Works, and much of its equipment is 75 years old or older. Some parts of the 8-inch mill are hand operated.
The company buys steel in billets and slabs, then produces shapes and bars. Its steel bars and shapes are used in the auto industry and for construction, agricultural and mining equipment.
vinarsky@vindy.com