`Caparo to close strip mill, lay off about 100`

By Michael Roknick
Herald Business Editor

Yet another hammer fell on Caparo Steel Co. Monday as the company said it would close another section of its Farrell steel plant.

Caparo gave the city of Farrell a 90-day notice that it will close its hot strip mill and lay off about 100 workers, said Lavon Saternow, city manager. The mill rolls thick steel slabs into thin coils.

Caparo employs 250.

The layoffs could begin sooner than 90 days, said Mayor Eugene C. Pasci. ``It wasn't a good first Monday in October,'' Pasci said. ``I thought things would be a little more positive. I still think they're trying to work things out and make things happen.''

Anthony ``Tony'' Kurley, president and chief operating officer of Caparo was traveling Monday and wasn't available for comment, his secretary said. Caparo spokeswoman Lori Darby said this morning she could only confirm that the company was closing the hot mill in 90 days and that she couldn't give any additional information.

Monday's announcement came a month after the steelmaker closed its electric furnace department and laid off 90 workers. While Caparo has two 120-ton electric furnaces it had only been using one for most of the year.

Electric furnaces were used to melt scrap steel to produce steel ingots which were eventually rolled into steel coils. When Caparo announced it would stop using the furnaces the company said it would buy slabs from other sources and then roll them into coils.

``What they told us was they couldn't supply the hot mill with enough slabs,'' Pacsi said. ``Between the high cost of shipping the slabs and the low cost (Caparo could charge) for steel it was difficult.''

Still, Caparo said it plans to continue operating its cold mill, Pacsi said. A cold mill produces high carbon and alloy specialty steels by continually running steel through a series of rolls to gain better gauge control and surface qualities.

To operate the cold mill Caparo will have to buy hot-band steel _ a semi-finished flat rolled steel _ which is what local pipe and tube makers use to create their products.

``They told us the cold roll was making money in the past two to three months but that everything else has been draining the company,'' Pacsi said.

In May the company told the United Steelworkers that the plant's monthly losses ranged between $1 million and $3 million. The USW represents 150 production and maintenance workers at the steel mill.

Union leaders couldn't be reached for comment on Monday.

Caparo told the city it was trying to get a partner for the plant to form a joint venture, Pacsi said. But Caparo executives didn't say what form the venture would take or name any potential partners, he added.

For Farrell the additional layoffs at Caparo mean a further drain on the city's dwindling finances. Wage taxes are collected by the city from those working in Farrell.

As previously reported, Caparo is seeking an unspecified tax reassessment later this month which will further crimp the city.

``We'll keep an eye on it and see what happens,'' Pacsi said of Caparo developments.

Caparo Inc. bought much of the former Sharon Steel Corp. steel plant on Dec. 2, 1994, for $26 million from Castle Harlan Inc. in bankruptcy court. Caparo Inc. is the American unit of Caparo Group Ltd., a private British company headed by Swraj Paul.

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Updated Oct. *, 1997
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