Severstal Gets Down to Business
By PAUL GIANNAMOREWHEELING - Severstal executives didn't come to town this week with a host of promises but shared a vision that will evolve, including the need to train the next generation of steelworkers for Severstal Wheeling.
That's the name of Wheeling-Pittsburgh Steel Corp. under the ownership of Russia's OAO Severstal. Severstal completed its purchase of Esmark Inc., former parent of Wheeling-Pitt, Aug. 4. The local plants will be operated as a semi-autonomous unit of Severstal North America Inc., based in Dearborn, Mich.
Ronald J. Nock, president and chief executive officer of Severstal North America, led a delegation of company officials in a meeting with local news media Wednesday morning at Oglebay's Wilson Lodge. Nock and other Severstal officials also conducted meetings Tuesday and Wednesday with employees of Severstal Wheeling.
"It's not in our overall business plan that the key to success is substantial downsizing," Nock emphasized.
In fact, the company plans to keep operating units that some employees feared might be closed as Wheeling-Pitt became part of the larger steelmaker. Beginning Friday, the Mingo Junction blast furnace, where iron is made, will be shut down for about 30 days for a partial re-line, and work also will be done on the steelmaking electric arc and basic oxygen furnaces, according to Wilbur Winland, general manager of Severstal Wheeling. Winland has managed the Mountain State Carbon coke plant as a joint venture of Wheeling-Pitt and Severstal in Follansbee since late 2005, overseeing a multimillion-dollar upgrade of the facility.
Winland said with the work, the Mingo blast furnace should be good for another 10-12 years without major upgrading.
The downtown Wheeling headquarters will continue to be the home of Severstal Wheeling, though some operations will be centralized in Dearborn, Nock said.
Winland noted Severstal's plan is to take the Severstal Wheeling operations to places in the steel business where Wheeling-Pitt wasn't in the past. Wheeling-Pitt's business, he said, was mainly based in the construction industry, largely through the Wheeling Corrugating division, and in broadline commodities.
"It was not highly specialized," he said. "But with the modernization we're bringing, the ability to serve multiple markets will be much greater."
Nock and Thomas J. Cera, chief operating officer for Severstal North America, said the company's units in North America now include the Dearborn works and a new mill in Columbus, Miss., as well as this year's purchases of Esmark, the Sparrows Point plant at Baltimore and WCI Steel in Warren, Ohio.
Executives are studying how to optimize the combinations of the facilities, but Nock said it's not uncharted territory. He recounted talking in the past with former Wheeling-Pitt CEO Jim Bradley about potential benefits of a combination a few years ago.
Nock said the company's commercial representatives from all its plants will meet in Wheeling within the next two days to go over what possibilities exist with the combination of Rouge, Sparrows, Warren and Wheeling-Pittsburgh's facilities under one company.
He said as an example of what can happen, Wheeling-Pitt's hot strip mill in Mingo Junction is capable of producing wider steel than what is made at the Dearborn plant, a heavy supplier to the automotive industry. That means wider strip from the Mingo Junction mill could be shipped to Dearborn for further processing, making the first entry into the automotive business for the former Wheeling-Pittsburgh Steel.
He and Cera also noted there is a potential shortage of workers properly trained and skilled to run a modern, highly automated steel mill looming in about three to five years. Nock indicated a training program is running out of the Dearborn plant, and similar training is being developed for Baltimore, Warren and will be for the Severstal Wheeling operations.
"The work force of tomorrow is not just a high school graduate with shovel skills. The skills will be different," Cera said, adding mechanical and electrical skills will be needed for the high-tech plants to come.
Both men stressed they do not intend to give the impression Severstal Wheeling will be ready to hire a new group of workers soon, but training must begin to have the next generation of steelworkers ready within the next three to five years. And Nock said there could be some opportunity in that time period for former Weirton Steel workers.
He said Severstal tries to survey employees to determine what its work force needs will be for the future, though he noted there is some reluctance at times for workers to tell the company when they're planning to retire.
"The message we're trying to deliver is that we do not want you to retire but that we need you to stay," he said.
Nock said the hot strip mill and the coke plant are "two crown jewels" of the former Wheeling-Pitt operations. He said while Martins Ferry's galvanizing lines are old, the company wants to see if there is a niche that will let the plant continue production in the long-term.
Sparrows, he said, produces between 600,000 and 700,000 tons more slabs than it can process, meaning the slabs could be rolled into coils at the Mingo Junction hot mill. He said there could be as much as 400,000 to 500,000 tons a year coming out of Mingo Junction to go to Dearborn to feed the auto industry.
Nock said, the company is market driven, trying to find ways to match product with customers. In all, Severstal North America has five blast furnaces, three electric arc furnaces and five hot strip mills.
Nock said the weak dollar has led to lower imports, which has allowed steel plants in the United States to run at a higher rate, even with auto sales down. The challenge, he indicated, will be in the long term, when the dollar eventually becomes stronger again and imports resurface.
"This is a business with ebbs and flows, and you have to have deep pockets to stay in this business," Nock said. "We're not here to flip the company. We're here to build the company over time, and you have to have the money to be able to do that."
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acmecoke1
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08-16-08 2:05 AM
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This is why you are a "gearhead." A member of a group who would sell out their own country just to protect their paycheck. You must be among all the union traitors who sold out for a temporary buck who work in the coke plant or the 80 inch mill. Wait until the layoffs begin! You "gearheads" will have your gears stripped! There is no pride in the American worker anymore. They will put the American flag on their helmet and claim how patriotic they are, but when it all comes down to it they are basically cowards. They let a group of the world's most criminal element take over their plant without a wimper. Your only care for yourselves and not the principles this country was based on. They invaded and took over your town and your family with them-What a joke!
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gearhead351w
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08-15-08 2:49 PM
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Selling out I hardly think so providing for my family yes! as I said will there be changes yes. that is one of the main problems you cant keep running*****poor equipment and expect to turn a profit if you are looking for a hand out then stand in the aid line if you are looking to work then do your job. To live in fear of things going on in their country has nothing to do with our jobs. And your statement of that the cold war is not over? What is happening is in their back yard and has nothnig to do with the U.S, and in fact that is our government's biggest problem we butt our nose were it doesnt belong before you complain about the crap in the neighbor's lawn we need to make sure our's is cleaned up first.
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acmecoke1
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08-15-08 2:47 AM
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Gearhead, you must be one of those "union heads" that love to lick the Russians hind end. The cold war is hardly over. Read the newspaper.Severstal was not the ones who had planned to reline the blast furnace at Mingo. Wait until they get Dearborn B furnace and Sparrows Point up to full production. Then you will start seeing the layoffs in the Ohio Valley. The coke plant will not have to worry. All of the coke will soon be sent to Baltimore or Warren. All of the slabs will be sent back to Mingo to be processed. All of the blast furnace, electric furnace and BOF workers will be looking for jobs, probably at Pizza Hut (or at the several new Russian tea houses). It also looks like Martins Ferry and Yorkville will be phased out, mainly because they are old and the Russians really do not want to invest in their old plant. Murder and money is their only object. Being employed by them is not an excuse for selling yourself out with the entire Ohio Valley. Shame on you.
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gearhead351w
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08-15-08 1:30 AM
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Katabatic you need to wake up from the 50's the cold war is over! Severstal is a great company to work for I know I work there. To all at wheeling welcome to the family. It is not to say that there will not be some changes, but they encorage mangement and employee relationship to work together. They say what they mean and do what they say. Severstal has already said that they are going to reline the blast furnace and I am sure that as time goes on they will grow the company so cheer up at least you still are employed.
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acmecoke1
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08-14-08 10:56 PM
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I see a just of people going to have a "Weirton Style" vacation very soon. Bring lots of "Russian" suntan lotion!
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acmecoke1
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08-14-08 10:52 PM
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It will happen exactly like I have told you union "idiots" all along. All the Russian bear wants is the "crown jewels" of the former WPSC. The 80 inch mill and the coke plant. Kiss the rest good-bye. Maybe not right now, but in the next year. The blast furnace and steel operations were already planned for an outage ever before Severstal entered the picture. But if the world demand for steel goes down, the hot end will be history. I told you about Putin and about his former KGB friends. They never will change. Look at Georgia, the Russians are using our steel to kill a small country just for sport. This is what the union has voted into the Ohio Valley. I don't see India doing this. You have shown the children in the Ohio Valley that we have no standards, no values and certainly no Christian ethics. The churches in this valley could have exposed what this scum of a country has done all over the world. But yet they stood silent as usual, and let the almighty dollar t
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EllisWyatt
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08-14-08 10:35 PM
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The valley wanted high steel prices-they have them. Due to a weak dollar, imports have slowed. Steel prices hit a record high. The US steel companies did just what any intelligent person knew they'd do when faced with no competition-they jacked up prices. Despite high steel prices and union support, Esmark couldn't make it work. Those Bouchard fellows sure sold you a line. Our dollar is weaker because the government printed billions to give you a "stimulus" and send $48 billion to Africa to go into a dictator's Swiss bank account, sorry, I meant fight AIDS. A weak dollar has limited imports and reduced our trade deficit. It has also spurred foreign investment. Isn't this what we asked for?
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Katabatic
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08-14-08 8:10 PM
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This interdepndant economics was supposed to make everyone so dependant on one another that one country would never attack another due to hurting itself economically. What a joke. I give you Georgia and Russia, and any Islamic nation and anyone else. They have no respect for human life, just like the commies. Ditto whispering hope. Steeler, maybe if the US government would subsidize the steel industry the way other nations do, Wheeling-Pitt would stand a fighting chance. We are being sold down the river by our politicians.
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whisperinghope
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08-14-08 7:37 PM
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steeler2509 It makes a lot of difference. Soon America is going to be owned entirely by outsiders!! Take over without a shot fired!! Trojan horse, you better believe it. Open your eyes America. Keep that paycheck coming lol at what cost? Wise up. Buy America, If a russians can make a profit with this mill, why can't Americans? I think we need to look a little deeper into protecting our country here at home. And GM investing how much money in Thailand? Wow, is there anything "American made?" So sad.
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atoddh
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08-14-08 5:19 PM
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The new owners were very clear"the hot strip mill and the coke plant are the Crown jeweles." Moreover:"Sparrow produces 600,000 - 700,000 tons more than it can process." And "some(Downtown) operations will be consolidated in Dearborn." This is a merger. The intention of mergers is to eliminate duplication of functions and streamline a larger operation. This is a for-profit operation.They will do what is best for the bottom line as was done at Wierton Steel.
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steeler2509
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08-14-08 5:03 PM
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Have they made anyone take paycuts? Have they made anyone make concessions? If a company, no matter where its from, wants to purhase a business (to make money) and they end up pouring capital into it to upgrade their facilities while looking to enter new markets, that sounds like a winner to the employees. Or perhaps you prefer the same old management that got the company into this mess? I'm not scared, I don't work there. It really doesn't affect me at all, except to the degree that I'd like to see the steel industry turned around so it can positively affect the area that I love.
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Katabatic
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08-14-08 4:30 PM
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Steeler, you sound like a scared, desperate man, willing to take yet more concessions and take more pay cuts to barely make ends meet. They got you just where they want you......under the thumb of the Russian bear. Get some backbone and principles. Then write me. Quit selling out for the almighty dollar. If you don't stand for something, you'll fall for anything.
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steeler2509
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08-14-08 4:06 PM
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Give them a break, what difference does it make what name is on the paychecks as long as they keep handing them out? This is about business and so far it sounds like this might be a win for the employees and the area.
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Katabatic
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08-14-08 3:53 PM
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They've invaded Wheeling like they are invading Georgia. They tell you nothing bad is about to happen, but their track record is not good in that regard. Only time will tell if the Severstal Russians are Gorbychov Russians or Putin Russians. (Yeah, sure you are withdrawing from Georgia.)
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