Renco Bid on Sparrows Point Has Met Union Conditions

A New York holding company that reportedly has signed a letter of intent to buy the Severstal-owned steel mill at Sparrows Point has met United Steelworkers union conditions to complete the purchase, a union leader said.

The company, the Renco Group, is controlled by Ira Rennert, whose net worth was listed at $5.3 billion last year by Forbes magazine.

In separate interviews, Severstal and Renco have previously told Patch.com they will neither confirm nor deny talks or accounts, citing unnamed sources saying Renco signed the letter of intent a month ago.

In an e-mail Wednesday, John Cirri, president of United Steelworkers Local 9477, explained the union has successorship language in its basic labor agreement, stating Severstal may not sell or transfer its assets to a new company unless several conditions are met.

One of those conditions requires the buyer sign an agreement with the union recognizing the union as the bargaining representative for the employees. The agreement with the union must also establish the terms and conditions of employment as of the closing of the sale, and provide the union with reasonable assurances that it has both the willingness and financial means to honor commitments.

“It's apparent that Renco has met those conditions with the Union,” Cirri wrote, responding to inquiry by Patch.com.

The proposed sale of the Sparrows Point mill is linked to the sale of other Severstal-owned mills in Wheeling, WV and Warren, OH.

The union’s role in the negotiations is being handled by the national United Steelworkers union, headquarted in Pittsburgh.

“My understanding is that Renco and Severstal are still talking, but any announcement regarding the outcome of those talks will come from them,” Cirri said. “We all are waiting anxiously for what we hope is a positive outcome for all the employees and our plant.”

In related news, Cirri also said that the union and Severstal’s joint petition requesting Trade Adjustment Assistance has been certified for additional benefits for laid-off workers. The Trade Adjustment Assistance program, according to the Department of Labor’s website, "helps workers who have lost their jobs as a result of international trade get back to work."

“The TAA program offers a variety of benefits and services to eligible workers, including job training, income support, job search and relocation allowances, a tax credit to help pay the costs of health insurance, and a wage subsidy to workers 50 years of age and older,” according to the Department of Labor website.

In July, Russian-owned Severstal North America laid off hundreds of local steelworkers as it announced the idling of the blast furnace and steel-making facilities at Sparrows Point. That fueled rumors that the company was looking to sell the plant, which were later confirmed.

“We just received certification for those benefits,” Cirri said. “I am hopeful that our members won't need these benefits and all return to work soon, but I did not want their local union to be in a reactive position for the unknown, such as if unemployment benefits were not extended or in the extreme case of a plant shutdown.”

In November, Severstal announced it was extending the idling of its primary operations at the Sparrows Point mill through the end of March.

The Sparrows Point plant has about 1,800 hourly employees, and currently there are about 850 laid off, Cirri said.