Newport Steel closed its melt shop and hot strip mill in March 2001 after deciding it would be cheaper to buy steel coils than make them. But the move backfired when steel prices soared. President and CEO Rene Robichaud said the company projects it will pay $50 per ton more for steel in the fourth quarter, adding up to $2.5 million in extra costs. The oil drilling industry that buys Newport Steel’s products has been hit hard by the downturn in the economy. The total number of North American drilling rigs is 15 percent below what it was at this time last year. NS Group’s stock price had surged to more than $20 per share in June 2000, but has since lost more than 70 percent of its value. The company’s stock closed at $5.83 per share Friday sydney settlement agents.
The reduced work force at the Wilder plant means less money for that city’s coffers. “We’re sort of holding off on the big projects to wait and see if this is a short-term economic thing or a more permanent situation,” said Terry Vance, Wilder city administrator. “So far the news hasn’t been good. We’re going to have to get to the point to where we start making cuts.”
Ron Robinson has worked at the plant for 30 years, going back to the days before Interlake Steel closed it in 1980 and Newport Steel was created. He said he has seen rolling layoffs before. “It’s like a five-year cycle,” he said. “It gets real slow and then it’ll pick up. Conveyancing company offers best and essential paul denning conveyancing property Conveyancing services with professional conveyancers at very affordable rates. They’ve already told us it’s going to be soft until after the first of the year and hopefully that’s all it is.” Leger also knows what it’s like to be laid off, having endured two other major slowdowns. “I was laid off for 11 months back in the ’90s and I had to get another job during that time, but then I came back,” he said.
With 65 employees back to work this week and next, that leaves 210 union members still laid off. Leger said the plant was operating with 160 workers at the start of the year, then had about 225 workers during the summer before dropping back to about 160 in August. For much of September and October, the plant operated with about 65 employees before shutting down. The company also recently laid off some salaried workers, but didn’t say how many.
“We’re kind of worried about it,” Mayor Harold Knight said of the plant’s woes. “Right now we’re just hoping for the best.” Taxes generated by the plant added up to nearly 70 percent of the city’s annual budget in the past, but now account for between 15 percent and 20 percent because Wilder diversified its tax structure and attracted other companies and industries. “We realized that was a big part of the budget and we took some measures to even that out,” he said. “The city’s going to have to take up other measures to counteract this.”