The Top Stories of 2012: Demise of RG Steel

WHEELING – At the beginning of 2012, thousands of retirees and displaced RG Steel employees waited anxiously to see when the shuttered mills of the once proud Wheeling-Pittsburgh Steel Corp. would reopen.

As the year comes to a close, the reality of RG Steel’s bankruptcy leaves the future of the steel industry in Wheeling, Steubenville, Mingo Junction and Martins Ferry in doubt. This is especially true now that published reports indicate much of the massive Sparrows Point, Md., RG mill is going to be demolished.

All is not lost, however, as Esmark Inc. – which purchased the RG Yorkville plant out of bankruptcy for about $4.7 million – has reached an agreement with the United Steelworkers of America that should allow the facility to return to operation in early 2013. The name of the Yorkville facility, long part of Wheeling-Pitt, is now the Ohio Cold Rolling Co.


When RG filed for bankruptcy in late May, some held out hope the matter would be resolved without a liquidation. After all, Wheeling-Pitt endured multiple bankruptcies during its years of operation, always eventually emerging.

However, this would not happen for RG, as the company began shedding assets. Records show that Wheeling businessman Quay Mull purchased the Martins Ferry RG mill out of bankruptcy. Mull has not returned numerous calls seeking comment regarding his intentions for the plant.

RG sold the idled Steubenville plant to a subsidiary of Herman Strauss Inc., a Wheeling-based recycling business. Strauss paid $4.3 million for about 103 acres, plus another $10.7 million for the scrap and machinery.

Esmark Inc. previously owned all the former Wheeling-Pitt facilities before selling them to Russian steelmaker OAO Severstal for $1.23 billion in July 2008. Severstal, after idling the Steubenville and Mingo plants in 2009, later sold these plants to RG.

As RG’s federal bankruptcy case continues, local elected officials are also left wondering if their cities are going to be left with a myriad of abandoned structures. Though some of the buildings have new owners, the fates of others remain unclear.

Downtown Wheeling Headquarters/Wheeling Corrugating

A Market Street staple since 1905, the future of the large RG Steel structure is in limbo. Wheeling Mayor Andy McKenzie acknowledged the building stands just across the street from the now cleared 1100 block of Market Street. However, he said the city will need to see how the bankruptcy case ends before taking any action.

This summer, as officials with Esmark considered purchasing the building from RG, Esmark Chairman and Chief Executive Officer James P. Bouchard said the downtown Wheeling structure served as the headquarters for RG’s Wheeling Corrugating division.

Bouchard ultimately decided against making a bid for the downtown structure and the Wheeling Corrugating brand. He instead entered a venture to purchase RG’s Yorkville plant, as well as a 50 percent stake in the nearby Ohio Coatings Co. tin plate production facility.

The Wheeling Corrugating website is now off-line. Also, the Business Development Corp. of the Northern Panhandle purchased the 600-acre Wheeling Corrugating property in Beech Bottom.

Mingo Junction

For about $80 million, Frontier Industrial Corp. officials- who purchased the massive Mingo Junction steel facility out of bankruptcy for just $20 million – believe they can restart the plant to get hundreds of people back to work. Though the mill has been shuttered since 2009, the largest and most modern of the local RG plants traces its roots all the way back to the steel company owned by Andrew Carnegie in the late 1800s.

About 10 years ago, company officials and local steelworkers said Wheeling-Pitt’s new $115 million electric arc furnace at the Mingo plant would give the company a new future. However, that new future did not last long. Frontier Industrial – a company whose website states that is specializes in “demolition” and “industrial gutting” – eventually was able to buy the entire plant, furnace included, for $20 million because of RG’s bankruptcy.

However, Craig Slater, general counsel and vice president for Frontier, said the company is not just a “rip and run” organization. He said estimates are that for about $80 million, the plant could start producing steel again. Though he could not commit to anything, Slater said his company has spoken with local, state and federal officials about getting some sort of assistance to restart the plant, while Frontier is also working with multiple potential investors to make the project work. He also said discussions with the United Steelworkers have been “positive.”


Pension payments for the thousands of local Wheeling-Pitt, Esmark, Severstal or RG Steel retirees and beneficiaries should be ensured by the federal Pension Benefit Guaranty Corp.

The federal agency recently acknowledged it would take over at least some of RG’s local pension obligations.

According to the organization’s website, the Pension Benefit Guaranty Corp. is “not funded by general tax revenues. PBGC collects insurance premiums from employers that sponsor insured pension plans, earns money from investments and receives funds from pension plans it takes over.”

The maximum benefit guaranteed by PBGC is adjusted by law annually. For plans that ended in 2010 and 2011, those who retire at age 65 can receive up to $4,500 a month.