Four years ago, the purchase of the Sparrows Point steel mill by OAO Severstal stirred hopes among steelworkers, their families and the community. Last year, the appearance of new owners Renco Group Inc. and its subsidiary, RG Steel, did, too. Four times in the past decade, expectations have periodically been raised in similar fashion.
Might the next owners turn things around and provide the needed investments to make Sparrows Point competitive again? Each time, those hopes have been dashed and a parade of managers proved themselves unequal to the task.
The recent Chapter 11 bankruptcy filing by RG Steel on the heels of the company's decision to shut down operations and lay off nearby 2,000 workers at Sparrows Point, beginning today, came as no big surprise. Like those investors who came before it, the company says it wants to find a buyer for the facility (as well as the company's related operations in West Virginia and Ohio).
And while it's not impossible that such a buyer may emerge, this time it seems less likely than perhaps ever before in the 125-year history of steel production at the site. No doubt Sparrows Point can be purchased as a distressed property for a bargain-basement price (just as Renco appeared to have gotten a steal at $1.2 billion last year, or $1 billion less than Severstal paid in 2008), but the market for U.S.-made steel seems doubtful at best.
One can find a host of things to blame for the current circumstances, ranging from RG's modest capitalization to the current economy and domestic steel surplus, but the failure to adapt to the realities of the global market and invest in the plant is the overriding cause. For the soon-to-be idle plant employees, prospects of a return to work, particularly on the steelmaking side (rather than finishing of steel products), appear to be poor, indeed.
That's why it's important right now that attention be turned to not only finding short-term opportunities for the jobless, but to envision and create a new future for the property and the peninsula. If not integrated steelmaking, then what?
Fortunately, there is an obvious opportunity in the nearby Helen Delich Bentley Port of Baltimore. Shipping is on the upswing, and with the opening of a 50-foot-deep berth at Seagirt Marine Terminal in Dundalk later this year, the port will be able to handle much larger vessels. The timing couldn't be better, as these massive container ships will become more common after the Panama Canal is upgraded to handle them in 2014.
But even as the port has seen more business — it was the fastest-growing major U.S. port last year, with 24 percent more trade than in 2010 — there is increasing concern that it will run out of room. Port officials have made it clear they need land to accommodate future expansion.
Baltimore County Executive Kevin Kamenetz's announcement last week that he is creating a Sparrows Point Partnership, a 16-member committee of business leaders to advise the county on how best to take advantage of this opportunity, is welcome. In announcing the advisory group, he boasted of the site's many assets — including access to the port and Interstate 695, two commercial rail lines and the largest ship graving dock on the East Coast.
What he did not mention, however, is that another reality of Sparrows Point is that a century of steelmaking has left much of the property badly polluted with toxic materials. It's a problem that was ignored and allowed to worsen for too long.
So while we applaud the county's efforts, we would humbly recommend that the partnership be expanded to include members with expertise in brownfields and environmental contamination, as well as representatives of the local communities. Their expertise and opinion would no doubt prove valuable in any discussion of the property's future.
Sparrows Point steelworkers are justifiably proud of what's been accomplished at the Point, from supplying the steel that built the Golden Gate Bridge to helping win two world wars. But it's clear that the future will hold something quite different from the past. Accepting that reality may be the first step toward bringing permanent, well-paying blue-collar jobs back to the peninsula.