Republic Technologies International, the Ohio-based steel maker that owns the former Bethlehem Steel bar mill in Lackawanna, said Monday it plans to close its specialty and stainless steel plant in Baltimore in December.
The shutdown of the Baltimore plant, which employs about 100 workers, is the third facility that Republic has closed this year as it grapples with lower-than-expected sales during the first half of this year and a cash crunch caused by its unexpectedly weak performance during the final six months of last year.
Republic had been trying to sell the Baltimore plant, along with its facility in Canton, Ohio, as part of a two-year push to divest its specialty steel division. But talks with one potential purchaser broke off during the second quarter and no other buyer has stepped forward.
"Despite the best efforts of our Baltimore employees and our corporate staff, the Baltimore plant continues to generate negative results and is inhibiting the rest of Republic from the success we are committed to achieve," said Joseph F. Lapinsky, who was named Republic's president and chief executive officer in February.
To ease the company's liquidity crunch, Republic has closed its melt facility in Johnstown, Pa., and plans to shut its outdated 12-inch rolling facility in Canton, Ohio, during the third quarter. Some of the work from the Canton plant is expected to be shifted to Republic's more modern bar mill in Lackawanna and another in Lorain, Ohio.
The company, which currently runs 13 plants, also has raised its spot prices, launched cost-cutting programs and reduced its inventories and capital spending.
Republic also has won permission from the Pension Benefit Guaranty Corp. to defer about $46,000 of its quarterly pension funding requirements for this year and 2001 until 2002 and 2003. Ohio environmental regulators also agreed to let the company defer $1.2 million in environmental spending until next year, according to filings with the Securities and Exchange Commission.
Republic also is offering early retirement incentives to at least 1,000 of its workers as part of an effort to trim its work force by more than 1,900 hourly employees over a four-year period. By the end of June, 758 workers had accepted early retirement packages.
Republic, which makes steel bars used in automobiles, heavy equipment and other products, has bought or merged with several competitors in recent years, hoping to become more efficient by closing outdated plants and shifting production to newer mills.
But profits have remained elusive. Republic's sales slid by 7 percent during the second quarter as a one-time charge of $45.8 million for closing the Johnstown plant contributed to an $81.9 million net loss.