Hundreds of layoffs loom Recession socks Valley steelmaker, auto parts supplier

By ED RUNYAN and DON SHILLING

WARREN — Waves, not ripples, from the nation’s economic recession — especially slumping auto sales — are being felt at two major Mahoning Valley employers.

Perhaps half of union and management employees at Severstal Warren, formerly WCI Steel, are being laid off indefinitely because of a plunge in orders, workers said.

Meanwhile, Delphi Packard Electric is laying off 99 area workers indefinitely because of declining orders from automakers.

Severstal workers were told in meetings Thursday that production at the mill is being shut down with the hope of restarting operations by June 1 or sooner if possible. The mill has about 1,200 hourly and salaried workers.

Mel Baggett, Severstal vice president of human resources, wouldn’t commit to a date for restarting the mill, but he stressed that the Warren mill is a key part of the Russian-based company’s North American operations. It bought the mill in July from a group of bondholders who brought WCI Steel out of bankruptcy.

“We’re going to start back up when the business climate improves. Severstal is committed to Warren,” he said.

The mill’s blast furnace, where molten iron is produced, was shut down for repairs in October and never restarted because of a decline in orders. The company kept workers on the job, however, to perform maintenance and attend training.

Baggett called the upcoming layoffs significant but wouldn’t give a number. He said some crews will remain on for maintenance and some salaried staff, such as sales representatives and accountants, will continue working.

At the union hall for Local 1375 of the United Steelworkers of America, workers seemed more relieved than angry about the news that many of them would be out of work for several months.

“They just let us know what was going on, which is nice,” said Billy Roberts of Niles, a 20-year veteran of the mill who works as a crane operator.

Workers were invited to one of three meetings either Wednesday or Thursday at the union hall so that a company representative could tell them what is happening.

“If it weren’t for Severstal, we’d be out of a job,” Roberts said outside the union hall after an afternoon meeting.

Roberts said he feels his job is much more secure now that the company is owned by Severstal. WCI Steel had been in bankruptcy twice.

“We’re finally owned by steel people,” Roberts said. “Severstal is a good company.”

Severstal has shut down its blast furnaces at mills in Maryland and West Virginia. A mill in Michigan is still making steel but at a reduced level. The company also has a minimill in Mississippi that is operating.

Baggett said he didn’t have figures for how much Severstal’s orders have declined. He said big drops have come in steel that is used for autos and consumer goods.

Executives still are examining first-quarter forecasts and are hoping orders will improve, he said.

Roberts said he has confidence in Severstal because it has invested in blast furnace repairs despite the mill’s being down.

He said he has faith that the plant will resume making steel before long and he will be able to retire from the mill in about 10 years as he planned.

“The plant is going to be here. We’ll weather the storm, and we’ll be back,” he said.

Tony Sabo of Niles, vice president of the union, said the current economic conditions are unlike anything the mill has seen before. Usually economic conditions drop gradually.

“In August, orders dropped off the cliff. They’ve never seen that before,” Sabo said. “We’re assuming they’ll come back that fast, too.”

Roberts and Sabo said laid-off workers will qualify for unemployment for at least 26 weeks and other benefits.

A rapid drop in demand also has hurt Packard, which has 750 hourly workers in the area that make components for automotive wiring harnesses.

The company has told workers that 99 of them are being laid off indefinitely, effective Dec. 22.

The layoffs are spread throughout Packard’s local operations and will be based on seniority, said Tom Krolopp, shop chairman of Local 717 of the International Union of Electrical Workers.

David Olsen, a Packard spokesman, said the auto supplier is trying to match its work force to demand. Any callbacks will depend on a revival of auto sales, he said.

General Motors, which is Packard’s biggest customer, reported sales drops of 41 percent in November and 45 percent in October.