WHEELING - 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."