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Workers at RG playing waiting game

June 19, 2012
By LINDA HARRIS - Business editor (lharris@heraldstaronline.com) , The Herald-Star

STEUBENVILLE - Workers at bankrupt RG Steel's Ohio Valley operations still are waiting to hear who, if anyone, is interested in buying their plants.

"People are definitely worried," United Steelworkers Local 1190 President Ernie Gambolin said. "People are torn, that's how I'd put it - we could very well have a future, or it could be we've come to the end, and that would be devastating."

Potential buyers have reportedly toured various plants throughout the area, but no one is saying what company those potential buyers represented and if they're interested in running the plants or scrapping them.

"I've heard three different groups so far, but there may have been more," Gambolin said. "I don't have 100 percent confirmation of who they are. I heard at one point a group was looking at the coke plant, they were looking for a long-term contract, but nothing has been confirmed. From what I've been told, the companies don't like being singled out."

So far, Wheeling-based Herman Strauss Inc. and a partner, River Rail Development LLC, have offered $15 million for a 111-acre parcel in Steubenville, and Esmark's Jim Bouchard, a past owner of Wheeling-Pittsburgh Steel Corp., has voiced interest in acquiring parts of the Wheeling Corrugating operation as well as an office building in Wheeling. A Bouchard spokesman has said his interest does not include any mill-related assets, such as Wheeling Corrugating's Martins Ferry or Beech Bottom plants.

"For a lot of these people, all they've ever known is the steel industry," Gambolin said, adding many are in their early to late 50s with college-age children. "This next month has got to be very hard on everybody involved."

Plagued by liquidity problems since acquiring the mills from Russia's Severstal NA for $1.2 billion a little over a year ago, RG Steel filed for Chapter 11 bankruptcy on May 31, citing more than $1 billion in debt. The company is currently maintaining limited operations with $50 million in debtor-in-possession financing while the company tries to find buyers for its assets. RG Steel has until late July to sell the operations.

"We know that money is being used up fast," Gambolin said. "It can't last forever."

RG filed suit in New York seeking $82 million in damages from the Russian company, claiming Severstal misrepresented working capital and contractual issues.

RG Steel also owns plants in Sparrows Point, Md., and Warren.

 
 

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