Twice in the past few weeks, Sparrows Point idled the main blast furnace, first, it said, for routine maintenance and the second time because of a shortage of raw materials.
"Unfortunately, in a completely unforeseen and unforeseeable turn of events, the company's lenders and equity investors have advised that they are suspending funding of ongoing ordinary course operations of the company," wrote Thomas Cera, vice president and general manager of RG Steel's Warren and Wheeling plants. "As a consequence of this unexpected development, the company is actively pursuing a buyer of some or all of the company's assets."
Baltimore economist Anirban Basu called the potential loss of nearly 2,000 employees a "significant blow" to the local economy.
"These are reasonably well-compensated jobs with sustainable benefits," he said.
Basu called on Baltimore County and state officials to support RG Steel's plans to find a new owner, "one that actually intends to own the plant for many years."
Taking it a step further, state and Baltimore County officials should try to influence the process by providing an incentive package, such as a tax break, to attract better-quality buyers, Basu said.
"We're one buyer away to turning this around," he said.
RG Steel provided notification under the Worker Adjustment and Retraining Notification Act, or WARN, a federal law that generally requires companies with 100 or more employees to give 60 days' notice to workers or their union, as well as to the state's dislocated-workers unit.
However, Thursday's notification fell short of the 60-day warning, with layoffs to begin in two weeks. RG Steel said it could not give notice earlier because the cash crunch was unexpected.
The state labor department's "Rapid Response" team has been mobilized to help affected workers and provide information on unemployment insurance, job placement and training opportunities.
"Layoffs and plant closures are always tragic, especially when such a historic local institution as Sparrows Point is affected," said Maryland interim Labor Secretary Scott R. Jensen. "While it's unfortunate that efforts by everyone involved in keeping RG Steel open and solvent have been unsuccessful, it is our hope that all RG Steel employees will find new employment as soon as possible, and we will deploy all our resources to assist them in their efforts."
Baltimore Sun reporter Steve Kilar contributed to this article.
Sparrows Point timeline
1889: Pennsylvania Steel pours first pig iron at Sparrows Point
1916: Bethlehem Steel buys the plant and announces $50 million expansion