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RG Steel laying off 1,975 at Sparrows Point

RG Steel LLC told Maryland’s labor department Thursday that it will lay off almost 2,000 employees starting June 4, as the company idles operations at its Sparrows Point steel mill.

Of the 1,975 employees who will be laid off, 1,714 are hourly workers and 261 are salaried. The last of the workers will be laid off by June 18, a Department of Labor, Licensing and Regulation spokeswoman said.

Bette Kovach, an RG Steel spokeswoman, said the company is in a liquidity crisis.

Federal guidelines mandate that employers with 100 or more employees provide 60 days notice in advance of plant closings or mass layoffs. RG Steel is technically in violation of that policy, but labor department spokeswoman Shannon Davis said there was no way to enforce the rule.

“It doesn’t always happen that way,” she said. “We appreciate 60 days notice.”

Kovach said the company is also stopping work at its Warren, Ohio, and Wheeling, W.Va., steel-making facilities.

“We’re in asset protection mode,” Kovach said. “We’re still looking for possible buyers.”

In a statement, interim DLLR Secretary Scott R. Jensen called the layoffs “tragic, especially when such a historic local institution as Sparrows Point is affected.”

“We have been in close contact with RG Steel leadership and are standing by to offer assistance to the men and women who count on family-supporting wages from their jobs at Sparrows Point,” Jensen said. “While it is unfortunate that efforts by everyone involved to keep RG Steel open and solvent have been unsuccessful, it is our hope that all RG Steel employees will find new employment as soon as possible, and we will deploy all our resources to assist them in their efforts.”

RG Steel is the fourth-largest flat-rolled steel company in the country, and bought the Sparrows Point steel mill in March 2011. At the time, RG Steel restarted idled operations at the historic mill.

Steel was first produced at Sparrows Point by Pennsylvania Steel Co. in 1889. For nearly 90 years, the plant was part of an enormous steel-making and ship-building complex owned by Bethlehem Steel.

Between the plant and shipyard, more than 30,000 people were employed during World War II, when the plant provided steel for hundreds of ships. By the mid-20th century, Sparrows Point was the largest steel mill in the world.

But the mill has been under duress since the early 2000s, changing ownership multiple times in that span before RG Steel got the mill running just over a year ago.

One of the mill’s blast furnaces was briefly shut down in December, but was restarted Jan. 13 after Cerberus Capital Management, a private equity investment firm, committed money to the company after prodding from Gov. Martin O’Malley. At the time, Baltimore County Executive Kevin Kamenetz said a strategy to improve the company’s cash flow needed to be devised.

In a statement Thursday, Kamenetz lamented the continued struggle of mill workers.

“Once again, the hard-working men and women at RG Steel Sparrows Point are facing tough times,” Kamenetz said. “We are keenly aware that thousands of workers and their families depend on steel making for their livelihood — plus thousands more who work for suppliers and businesses related to the Sparrows Point mill.”