MORGANTOWN, W.Va. (AP) — Wheeling-Pittsburgh Corp. is negotiating with the United Steelworkers to relocate nearly 270 workers and most of its equipment from Allenport, Pa., to a mill in Ohio, a move the company says could eventually save up to $60 million a year.
Each year, Wheeling-Pitt ships more than 1 million tons of hot-rolled steel about 57 miles from Steubenville, Ohio, for processing at a cold mill in Allenport, then back to Steubenville, Chairman and CEO James Bouchard said Thursday.
Freight costs alone top $20 million a year.
''It hurts our delivery performance for the customers,'' Bouchard said, ''and the transportation costs are killing us.''
West Virginia-based Wheeling-Pitt said late last month it planned to invest $125 million in a new cold mill and galvanizing complex on the site of an old blast furnace in Steubenville. That apparently alarmed officials in Allenport, who told a local newspaper this week that workers would be laid off.
''No one is losing their jobs,'' Bouchard told The Associated Press. ''There will be no layoffs. All those workers at Allenport will have the opportunity to come to Steubenville and have the same jobs as they had before and run the same piece of equipment. We don't want to hurt anyone.''
The company aims to relocate the mill in 12-18 months, he said.
The long-term capital investment plan for Wheeling-Pitt does include a voluntary retirement package for all plants, but the company says it will actually add jobs over time as it restructures.
The distance between the Allenport and Steubenville mills is about a 90-minute drive, so workers would likely make a longer commute or move their families. Bouchard said he is working with the USW to craft an attractive package for employees, but said the board of directors still must approve the plan.
''No decision has been made,'' he said.
Nor would the Allenport plant necessarily close. A bridge-decking unit at the former Winner Steel Inc. in Sharon, Pa., could be transferred to either Allenport or to Martins Ferry, Ohio, Bouchard said.
Illinois-based Esmark Inc., which now controls Wheeling-Pitt, announced in February it would buy Winner with Russia's Novolipetsk Steel and Switzerland's Duferco Group.
Winner is one of the largest independent producers of galvanized steel in the United States, with three lines that can produce some 1.2 million tons a year. Its products are used mainly for construction, appliances and automobiles.
Winner has operated in Sharon since 1995. It has about 200 employees represented by the United Steelworkers.
The Allenport mill employs 269 people, about 30 of whom are management. Altogether, Wheeling-Pitt employs about 3,000 people in West Virginia, Ohio and Pennsylvania.
Bouchard and brother Craig, principals of Esmark, took control of twice-bankrupt Wheeling-Pitt last year in a proxy fight. The pair have been working since to restructure the steelmaker and return it to profitability.
E2 Acquisition Corp., a joint venture led by Esmark, is also buying Mittal Steel Co.'s Sparrows Point mill in Maryland. Wheeling-Pitt and privately held Esmark are the lead partners in E2.
Shares of Wheeling-Pitt rose 37 cents, or 1.9 percent, to close at $20.20 on the Nasdaq composite index.