With blast furnace down, Sparrows Point layoffs begin

The first big wave of layoffs hit Sparrows Point on Friday after the steel mill's owner essentially shut down its critically important blast furnace.

Joe Rosel, president of United Steelworkers Local 9477, said most of the workers told not to report back to the Baltimore County mill next week were in the iron- and steelmaking departments, though he couldn't say how many were notified. Other workers, including many in central maintenance, also were notified.

The "L" blast furnace shutdown that began Wednesday starts a domino effect of layoffs that is expected to affect nearly 2,000 workers — all but a few hundred at the steel mill. Cash-strapped owner RG Steel LLC filed for bankruptcy protection from creditors last week and needs to sell Sparrows Point and its other facilities by the end of July.

Workers have been in similar straits with former owners, including Severstal, which idled the mill for months before selling to RG Steel. Rosel said he remains optimistic that Sparrows Point will get another shot with a new owner.

"People have a right to be concerned, but we've been through this before," he said. "These are good assets, and I think [buyers] are going to get a good bargain."

Also Friday, Maryland's U.S. senators urged federal labor and tax officials to quickly approve eligible Sparrows Point workers and retirees for a program that gives retraining assistance, financial help and health care tax credits to people put out of work by foreign trade.

Sens. Barbara A. Mikulskiand Ben Cardin said in letters to the heads of the Department of Labor and the Internal Revenue Service that petitions filed for RG Steel workers in earlier layoffs took more than a year to be approved.

"These benefits are literally a lifeline to employees who have been laid off and are training for new employment while also supporting their families," they said in the letter, also signed by senators from West Virginia and Ohio, where RG Steel has facilities.

The Maryland Department of Labor, Licensing and Regulation said it has set up a dedicated help line for unemployed Sparrows Point workers, 410-853-1700. It is part of the state's and county's rapid-response effort, which will include a resource fair late this month to connect laid-off workers with help, including foreclosure prevention and social services.

"We're ready for them," said Scott Jensen, the state's interim labor secretary.

RG Steel owes more than $1 billion, according to court filings. Among its creditors: Baltimore County, which had been on the brink of selling liens on the Sparrows Point property at tax sale when the company filed for bankruptcy protection. The steelmaker owes $4.5 million in state and county property taxes and related fees.

"RG was pulled from the June 4 tax sale because of the bankruptcy," said Fronda Cohen, a spokeswoman for the Baltimore County Department of Economic Development.

The company, which did not respond to questions Friday, has said that layoffs will be staggered as workers finish customer orders. No new orders are being taken.

Layoffs will follow at the hot mill, perhaps in a week or two, Rosel said, and then at the cold mill, which could run into the first or second week of July. By the end of July, he said, only a couple of hundred workers will be left in the facility, handling asset protection and fire watch.

Many of the mill's workers are eligible for retirement — more than 700, Rosel estimated. But about half the employees have less than 17 years at the plant, he said.

Rosel, who followed his grandfather, great-uncle and uncle to Sparrows Point, wants the mill to outlast him.

"I'm third generation; I would like to see the fourth and fifth generation make it through," he said.



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