Published Friday, February 28, 2003
A former Sawhill Tube plant in Wheatland, now owned by Wheatland Tube Co., is fighting for its life. The company said it will close the mill in two months unless a deal with a potential buyer is completed.
"We notified the hourly union representatives and salary group at the Cold Draw Division in Wheatland Wednesday that we were going to exit the business,'' company Vice President Bill Kerins said Thursday.
A total of 115 hourly and salaried people work at the Clinton Street mill. The company has another plant in Wheatland -- on Council Avenue. Its operations are separate.
The 300,000-square-foot-plus plant in jeopardy was part of last April's deal in which Wheatland Tube's owner, Collingswood, N.J.-based John Maneely Co., bought the assets of AK Steel Corp.'s Sawhill Tubular Division. The deal also included Sawhill's Sharon and Warren, Ohio, plants.
Wheatland Tube tried to make a go of the plant for nearly a year, but couldn't generate a profit there, said Kerins, who declined to give any figures.
"That location has suffered significant losses over the years,'' Kerins said. "We did our very best from the start, but we decided we didn't see any future there. After a long business review, we decided that business is not part of our core strategic market.''
Workers will be formally notified of the looming plant closing within the next 10 days to meet the requirements of the federal plant-closing law, which requires a 60-day notice.
However, Kerins held out hope that the plant could be sold to a potential buyer. He would only describe the suitor as an investment group.
But a successful sale hinges on workers' cooperation, Kerins said.
"The investment group is interested in keeping the operation in place,'' Kerins said. "A critical part of the due-diligence is for the buyer to work out a more favorable arrangement with the work force. We're working right now just to try to facilitate the process and hope both sides can work something out.''
United Steelworkers Local 1016-07 represents 100 production and maintenance workers at the plant. Tom Maykowski, unit president of the local, said the union will hold a face-to-face meeting with the potential buyer on Thursday.
"Until we meet with them we won't know who they are,'' Maykowski said.
He also didn't know if the potential buyer is seeking wage or benefit concessions and declined to comment if the union would offer any to keep the plant alive.
"We were told they want a five-year contract,'' Maykowski said. "We have two years left on our current contract and maybe they want to extend it for another three years.''
The mood among workers at the plant cuts across every emotion, he added.
"It ranges from one guy who's close to being on suicide watch to another guy who says everything will be fine,'' Maykowski said.
"Labor relations since the acquisition (by Wheatland Tube) have been marvelous. It's like night and day,'' he said. During the last year, union workers filed two grievances, compared to 40 the year before when it was owned by AK Steel, Maykowski said.
A deal with the investment group could be hammered out before the plant is closed in two months, both Kerins and Maykowski said.
"We're cooperating fully with the prospective new owner on an expedited basis so that it could be done within that period,'' Kerins said.
The plant's market has steadily declined since the mid-1990s, suffering from overcapacity and dwindling demand.
The plant mainly produces mechanical tubing from a half-inch to 5 inches in diameter. Its products are frequently used in the automotive industry for such items as tire rods and bushing and in manufacturing for such things as conveyers and motor housings.
The pipe and tube industry has been suffering its greatest downturn in more than 20 years due to a sluggish economy.
"It's the pits right now,'' Kerins said.