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New owners to overhaul Eastern Stainless mill


With plans to invest $50 million in the ailing stainless steel mill, the new Swedish owners of Eastern Stainless Corp. are to be officially welcomed today by state and local officials who hope to see a once thriving Essex plant revived.

Officials of Avesta Sheffield AB, the world's second largest stainless steel maker, are scheduled to detail their plans for the mill at a news conference this afternoon at the sprawling plant.

These plans include starting up mothballed operations, introducing new product lines and overhauling labor-management relations.

The Stockholm-based company bought Eastern Stainless in a deal valued at $55.6 million from Armco Inc., which held 84 percent of Eastern's stock. The sale was completed Tuesday with the approval by Eastern Stainless shareholders.

Along with the new owners, the plant also has a new name -- Avesta Sheffield East, with the "East" added to distinguish it from its new sister plant in New Castle, Ind.

Eastern Stainless, which has seen its work force decline from 1,500 in the early 1980s to only a few hundred now, has been on the skids for more than a decade, losing money year after year.

The company, which produces stainless steel plate, filed for bankruptcy protection in 1986. Then it was bought by Cyclops Industries Inc. in 1988, which in turn was acquired by Armco in 1992.

Avesta will spend about $50 million in the next three years on new equipment, training and environmental cleanup of the plant, according to John D. Porcari, a policy liaison for Gov. Parris N. Glendening.

About $20 million of this will be spent in the first year, with $5 million to $6 million being spent on reactivating the plant's melting shop, and another $12 million on a new annealing and pickling line that will allow the plant to produce coiled stainless steel plate, he said.

The state and Baltimore County are also providing $1.8 million in grants and loans to Avesta for equipment, worker training, and cleanup.

Yesterday, the plant was closed for three days as workers started orientation meetings at Martin's Eastwind banquet hall on Pulaski Highway, according to Joe Duncan, president of Local 1245 of the United Steelworkers of America, the union representing hourly workers. "I've got hopes, but I don't have a crystal ball," Mr. Duncan said about the plant's prospects.

Despite plans for expansion, the plant will reopen Monday with only 140 workers -- down 150 from this week, Mr. Duncan said. Of the ones missing, 56 took retirement or severance packages and 96 are on layoff, he said.

But Mr. Duncan said the company has said the work force should rise to about 350 within a year. But that is still less than the 450 that had worked at the plant as recently as a year and a half ago, he said.

While Mr. Duncan is hopeful the new management will turn around the mill, he is concerned that much of the former management responsible for the problems is still in place. "The only thing that bothers me is the old guard," he said.

But Charles A. Turack, director of sales and marketing for Avesta, said the company's direction will change. "Our view is that senior management has changed and is bringing a much different philosophy to the situation," he said.

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