Recession stalls restart of Severstal

By Don Shilling

The Warren steel mill cancels plans to restart operations by June 1.

WARREN — The restarting of steelmaking operations at Severstal Warren is being delayed by the lingering recession.

The blast furnace will not be restarted by June 1 as company officials had hoped, and more than 800 hourly workers will remain laid off.

Greg Echols, mill general manager, told employees in a recorded message Friday that the company won’t meet the target date it had set because it doesn’t have enough orders. The blast furnace produces molten iron which starts the process of making steel.

Echols could not be reached to comment, but Mel Baggett, Severstal’s vice president of human resources, said it’s impossible to predict when enough orders will flow in to restart the mill.

“We are matching the capacity of the plant with our order book,” he said.

Orders were so bad last fall that the company said in December that it was laying off hundreds of workers and shutting down steel production until perhaps June 1. Actually, the blast furnace had been down since October, when it was closed for repairs, but employees were kept on until December.

Since then, the number of layoffs has varied because different departments that process steel have been open.

In general, about 800 of the mill’s 1,000 hourly workers have been laid off, union officials said. Some of the mill’s 250 salaried workers also are off the job.

Baggett has stressed that the Warren mill, which used to be known as WCI Steel, remains a key part of production plans for Russia-based Severstal. The company also has reduced or stopped steel production at other mills in the U.S.

The company acquired the Warren mill last year right before car sales and the economy in general took a steep drop.

shilling@vindy.com