Steel Industry Falls on Hard Times
During the holidays, a brightly lit Christmas tree and mechanical Santa greeted workers at the massive Wheeling-Pittsburgh Steel Corp. plant in this small Ohio River town, but the festive scene provided little cheer to those who fear what the new year might bring.
Amid huge losses, Wheeling-Pitt filed for bankruptcy protection just before Thanksgiving, a few days before a large debt payment was due. It is one of nine U.S. steelmakers to take that route in the last two years.
Earlier this month, more than 1,500 Wheeling-Pitt workers--a third of the company’s work force--were on temporary layoff, and with imports and energy costs rising and steel prices at 20-year lows, the company’s outlook is bleak.
“We go to work every day and hope for the best,” said Jon Panepucci, a crane operator at Wheeling-Pitt’s plant in Martins Ferry, Ohio. “We can’t plan ahead at Wheeling-Pitt. We’re in the dark like everyone else.”
The company is in a tough business and has faced tough times before--it operated while under bankruptcy protection from 1986 to 1991 and endured a 10-month strike in 1997.
But this time, because of the high production costs and prices suppressed by imports, the situation is different.
“When you took all this into account, we said we’re going to have a hard time making it,” said James Bradley, Wheeling-Pitt’s president and chief executive. “This situation is far more dire than the industry has seen in my working career.”
Early this year, LTV Corp., the nation’s third-largest steelmaker, filed for Chapter 11 protection, blaming unfair imports for driving down steel prices. LTV lost $368 million through the first nine months of 2000 and is carrying $1 billion in debt.
The Cleveland-based company, with 18,000 workers, is scrambling to regain its footing, but it warned that it might have to shut down if new financing can’t be lined up.
And Weirton Steel Corp., the No. 8 steelmaker in the U.S., laid off more than 1,000 employees Christmas week. The company, based in Weirton, W.Va., said that it planned to lay off as many as 200 hourly workers after the holidays.
Brazil, Japan, Korea and Russia are the leading sources of steel imports, which could surpass 40 million tons this year, the U.S. Commerce Department reported. Steelmakers and unions accuse overseas producers of dumping below-cost steel on the U.S. market and have pressed the U.S. government to slow the flow.
Bradley earlier this month assailed a decision by the U.S. Export-Import Bank to guarantee a loan to a Chinese steelmaker that will allow that company to expand its output.
“There are more than 100 million tons of excess steelmaking capacity around the world,” Bradley said in a statement. “This loan will add to that excess capacity and will further jeopardize the jobs of Wheeling-Pittsburgh Steel’s 4,800 employees, as well as tens of thousands of others throughout the domestic steel industry.”
Wheeling-Pitt, which traces its origins to an iron foundry that manufactured nails in Wheeling in 1852, is now owned by New York-based WHX Corp.
It is the ninth-largest integrated steel manufacturer in the U.S. and makes steel for cars, pipes, appliances and food cans. In West Virginia’s northern panhandle, it is among the largest employers.
