Evidence points to optimism for the future of WCI Steel

Evidence points to optimismfor the future of WCI Steel
A string of recent developments at WCI Steel in Warren indicates that the company, unlike so many struggling Mahoning Valley steelmakers before it, will beat the odds to emerge from bankruptcy protection a viable manufacturer and lasting contributor to the region's economy.
The most recent cause for optimism lies in this week's start of a $15.3 million relining of the mill's blast furnace. WCI employees will work with subcontractors to replace the brick lining of the furnace where iron ore, limestone and coke are combined to produce molten iron, the basic ingredient in the custom steel products WCI manufactures.
Such massive reinvestment definitely is not the sign of a company near the throes of dissolution. Indeed WCI, the third largest industrial employer in the Valley, is financing the entire relining on its own, forgoing the need to seek borrowed capital.
More encouraging signs
The relining, however, is not the only bright spot for WCI, its workers and this community. To wit:
U WCI Steel earned $8.9 million on sales of $55.1 million in April, its third consecutive profitable month since it filed for Chapter 11 bankruptcy protection last September. Sales of WCI-produced steel have been brisk and prices for steel remain high.
U WCI Steel has reached a tentative agreement with United Steelworkers of America, a crucial step in the steelmaker's plan to emerge from bankruptcy protection. The plan calls for a slight downsizing of the work force and changes in work rules that WCI hopes will enable it to compete more favorably in the global marketplace.
UTwo competing plans to carry WCI out of bankruptcy - one from WCI's parent Renco Group and another from a group of creditors - share at least one common and promising thread: Both pledge to continue operating the integrated steel mill, not liquidating it.
Challenges remain
Despite this volley of positive news, the long-term viability and security of the Valley's only remaining mill to produce steel from raw materials is not guaranteed.
Regardless of which plan is accepted by federal bankruptcy court, the company must remain vigilant in adhering to the plan to restructure debts and operating costs.
It must also work aggressively to implement the changes in work force rules that will ask each WCI employee to perform a variety of tasks to lend greater efficiency to overall manufacturing operations.
Another wild card is the long-term economic health of the cyclical U.S. steel industry. Currently, higher steel prices and increased domestic demand have bolstered the industry. These positive trends, however, have been slightly offset by higher prices for raw materials to produce steel.
Today, however, optimism abounds that WCI will come out of bankruptcy as a slightly leaner but immensely meaner company, one that will be able to make a long-term commitment to the livelihood of its employees and to the Mahoning Valley economy.