Talks between Severstal, union begin next week

Meeting held to discuss Mingo Junction plant

By PAUL GIANNAMORE, Business editor
STEUBENVILLE — Negotiations between Severstal Wheeling and the United Steelworkers union, which has been on month-to-month contract extensions with the Russian-based steelmaker for 18 months, will begin next week in Pittsburgh. That was the word from Santo Santoro, USW District 1 representative and other officials during a meeting to discuss Severstal’s Mingo Junction works, called by state Rep. John Domenick, D-Smithfield, at Eastern Gateway Community College Friday afternoon. Severstal representatives who had been meeting quietly with local political leaders and some Steelworkers officials departed when Domenick opened the public session. However, the officials were clear that market conditions must warrant the restart of the furnaces, caster and hot-strip mill at Mingo Junction, but that the company doesn’t intend to walk away from the mill. Severstal Wheeling workers have been disheartened with word coming earlier this month that Severstal would be restarting furnaces at its Warren mill while not restarting them in Mingo Junction. Union officials made it clear during and after the public meeting that the restart of Mingo Junction is the main issue for them. Outside the session, Wilbur Winland, general manager for Severstal Wheeling said the issue is that Warren makes small batches of specialty steels that are coming back into demand as the economy begins to recover. “Severstal has not given up on the Ohio Valley,” Winland said. “The facilities have been maintained in a way that will allow them to be used if the market demand is there. We’ve taken care of them.” Back in the session, Santo Santoro, a USW District 1 official, said all local Steelworkers want is the opportunity to go back to work. “We’ve got to find someway, somehow, to get our Mingo Junction plant started,” he said. Santoro indicated there would be two weeks of negotiations, then a break of a week, then talks would resume again. He said workers will be kept informed of what’s going on at the bargaining table. Domenick, and state Sen. Jason Wilson, D-Columbiana, discussed a variety of issues that have been brought up by Severstal in talks with government officials. Among them: Finding a way to ease a repayment schedule on fines owed to the EPA if the plant restarts and negotiating a lower rate agreement with American Electric Power. The Mingo Junction plant is a major electricity consumer when its electric-arc steelmaking furnace is in operation. The hot-end of the plant, including the blast furnace, basic oxygen furnace and EAF were shuttered shortly after Severstal bought the former Wheeling-Pittsburgh Steel mills from Esmark in August 2008. Most of its Ohio Valley facilities were taken out of production last spring. Severstal recently confirmed full capacity production is being resumed at its Follansbee coke batteries and plans in coming weeks to restart galvanizing lines at Martins Ferry and the Yorkville mill, which treats coils for further processing for tin mills. Mingo Junction Mayor Domenic Chappano asked the state officials about a tax abatement given to Wheeling-Pitt when the EAF was built earlier in the decade. The 10-year abatement included a guarantee of nearly 1,000 jobs. State officials have said on previous occasions that the abatement became moot when Ohio eliminated personal property taxes. Lisa Duvall, a staffer for Gov. Ted Strickland, said she would check into that. Domenick, Wilson and many of the 300 or so Steelworkers in attendance, discussed the impact of Chinese steel production, unfair trade practices and a lack of enforcement by the U.S. government. Duvall noted Wheatland Tube won a case on unfair pipe imports before the U.S. International Trade Commission. Wheatland is one of the Mingo Junction plant’s largest customers, Steelworkers officials said, but Severstal apparently has transferred production to supply Wheatland to other Severstal plants, including a recently completed, nonunion facility in Columbus, Miss. Santoro said it’s costing Severstal about $18 million a month to continue without a contract with the local mills closed, including having to continue to pay health care and supplemental unemployment benefits under the month-to-month extensions of the old Steelworkers contract. Santoro said the pattern for the industry was set with U.S. Steel and Mittal Steel in 2008, so there are guidelines for the union to follow. He said while it is good that Yorkville and Martins Ferry are returning to work, Mingo Junction is the key to steel production ongoing in the area. Earlier this week, Severstal said it was working on supply arrangements for the steel that is fed into the mills at Yorkville and Martins Ferry — steel that used to come directly from the facilities at Mingo Junction. Some workers said while it’s good to receive benefits while undergoing retraining, it is of questionable value for people in their late 50s and early 60s. One worker suggested the government find a way to help complete buyouts of older workers to tide them over until they reach retirement age while spending the training money on younger workers who have longer careers ahead of them. Wilson said state officials have discussed intentions with Severstal and have asked if there are parts of plants or Severstal-owned land around current plants that could be sold and put to other uses, such as for other factories, given that the land already has available infrastructure installed and would be good for redevelopment sites. John Saunders, a USW contract administrator, said unemployment benefits for most Severstal Wheeling workers will be expiring in February absent another extension by the federal government. Saunders also said to the government officials that the concern doesn’t end if a contract is signed. He said with a contract, the medical benefits and SUB pay to about 800 workers would end, with immediate impact on the community if the workers aren’t returned to paying jobs with a new benefit package under a new contract. He emphasized the need at least for another 13- or 26-week extension of unemployment benefits by the federal government. Saunders said after the meeting that if Severstal was able to find a way to head toward restarting the Yorkville and Martins Ferry mills, “then why can’t we do it at Mingo Junction? We want the same opportunity and are ready to give them the same flexibility to compete. They can call us 24 hours a day, seven days a week. We’ll be there.” (Giannamore can be contacted at pgiannamore@heraldstaronline.com.)