Sparrows Point has shut down steelmaking operations as the Baltimore County plant struggles to pay its bills and win back customers, workers said Friday.
Elizabeth "Bette" Kovach, a spokeswoman for Sparrows Point owner RG Steel, did not return several calls to confirm shuttering of the mill, which employs more than 2,200 workers.
But analysts and workers said that managers began meeting with employees Thursday to tell them not to report to work next week. The shutdown comes nine months after RG Steel bought the steel mill from Russian company Severstal.
The workers said managers gave little detail about the length of the shutdown, describing it as "indefinite."
It is unclear how much of the plant will be shut down. The workers, who didn't want their names used in fear of retribution, said that the entire plant would close, including the tin, hot and cold mills. Also idled will be the blast furnace, which is used to extract and melt iron and is a primary part of the operation.
Maintenance-related staff would still report to work. Maintenance workers usually stay on during a shutdown to keep up machines for when the plant reopens.
Walt Brown, who works on the maintenance side as a construction electrician, said he was told to report back to work Tuesday and was surprised at news of a shutdown.
"I have been on vacation, so I didn't know what was going on down there," he said.
Baltimore County Councilman John Olszewski Sr. said a friend who works at the plant called Tuesday to tell him he had been laid off.
"It is a temporary layoff, but who knows what temporary means?" Olszewski said.
Olszewski had been hearing from worried workers all week that RG Steel will close down the cold mill and steel operations next week.
Workers said they had been given little information from the local union.
Chris MacLarion, acting president of United Steelworkers Local 9477, which represents workers at the Baltimore County steel mill, said the union would have no comment about the layoffs. He told employees in an email not to speak to the news media.
The shutdown comes as Sparrows Point has struggled to pay vendors. The steel mill owes tens of thousands of dollars to companies such as Sherwin-Williams, maintenance contractor A-Tech Hydraulics and Kinder Morgan, which supplies iron ore and coke, the raw materials used to make steel.
Before Friday's developments, the steel mill was already in the process of shutting down the plant's main machine shop.
Analysts said the steel mill has faced challenges since being mothballed from July 2010 until just before the Renco Group, RG Steel's parent, took over in March.
The company has had a hard time winning back customers that turned to other suppliers during last year's shutdown. Steel prices fell just as it was entering the market, and there a glut of steel being sold, analysts said. It also takes a lot of money to restart steel production.
"One of the problems is they may be running out of cash," said Michael Locker, a New York consultant with Locker Associates
Charles Bradford of Bradford Research said a shutdown may be good for the steel market, which he said has too much supply.
Olszewski said the timing of a shutdown couldn't be worse.
"It's a shame," he said. "It's right around Christmastime."
Jamie Smith Hopkins contributed to this report.
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