The prospects for steelmaking at Sparrows Point look bleaker than ever. The mill was auctioned off last week for a paltry $72 million as part of owner RG Steel’s bankruptcy two a joint venture of two companies that do not make steel. Instead, the primary business of one of the firms involved, Hilco Trading LLC, is buying distressed industrial assets and selling them off for parts. There is now a very real possibility that the plant that made steel for the Golden Gate Bridge and the ships that won
But that possibility is not a certainty, and elected officials and mill workers are right to fight it as long as they can. Even in an era when U.S. steelmaking is at a disadvantage to foreign competitors in countries that don't always play by the rules of fair trade, Sparrows Point and its workforce have value that would be wasted if Hilco sells the plant for parts. The plant is relatively modern and has rare access to a deep water port. The right purchaser — a vertically integrated operation that would be less susceptible to spikes in raw materials costs — could make a profit on operations there.
Moreover, there is nothing that could replace the steel mill on that property any time soon that would have anywhere near the economic impact or provide anything like the same quality of employment. The mill doesn't employ 30,000 people like in its heyday, but until its recent shutdown, it did still provide jobs for 2,000 people — 1,700 union workers and 300 managers. Thousands of other jobs in related industries are also attributable to steelmaking there. And the jobs are good ones. The union workers, who need have no more than a high school diploma but who receive extensive on-the-job training, can earn $100,000 a year or more if they are willing to work enough overtime. They also get good health care benefits and pensions. Although many of them have skills that are transferable to other industries — the plant employs welders, electrical workers, plate fitters, and heating and air conditioning specialists — they would be hard pressed to find employment of that caliber elsewhere.
Plan A is to find a new buyer. The judge handling RG Steel's bankruptcy still must approve the sale to Hilco and its partner, Environmental Liability Transfer, and a number of the plant's creditors, including Baltimore County, which as a $4.6 million tax lien on the property, have objected. That could buy some time. Moreover, the new owners have promised not to destroy any steelmaking assets for at least six months, which suggests that they may be open to flipping the property for a profit rather than dismantling it and selling it for parts. What's more, Environmental Liability Transfer has a history of cleaning up contaminated properties and selling them or leasing them for reuse.
Steel firms had a chance to bid at the auction and didn’t, though there is some evidence that it might not have been for lack of interest. Representatives of the Brazilian steelmaking firm CSN spent about three weeks inspecting the plant before the auction. The company did not bid, but local and union officials say they think that had the auction not taken place so quickly, it might have. There are a handful of other domestic and international firms that could also be a good fit for the plant, and both the union and Maryland government officials — from Baltimore County Executive