Gerdau Ameristeel Sand Springs Mill Remains Idled

This is a followup to our earlier report a few weeks ago on the closing of this steel factory:

After careful evaluation of a comprehensive proposal submitted to Gerdau Ameristeel by the State of Oklahoma and the City of Sand Springs, aimed at maintaining steel production at the company's steel mill in Sand Springs, the steel manufacturer recently decided to continue the idling of its Sand Springs steel mill for the foreseeable future.

"We appreciate the hard work of the City of Sand Springs, the State of Oklahoma, and the Sand Springs legislative delegation, led by house speaker Chris Benge, state senator Dan Newberry, state representative Lucky Lammons, and Sand Springs city manager Doug Enevoldsen," said Terry Sutter, vice president and chief operating officer of Gerdau Ameristeel. "We commend them for their extraordinary efforts in trying to find a workable solution to a very difficult problem. Unfortunately, due to a combination of on-going weak market conditions, our need for a significantly more flexible workforce structure at the mill, and the significant capital investment required by the company, we have decided not to move forward."

Company executives met in January with representatives from the Oklahoma Treasury Department and the Department of Commerce, as well as with local officials and members of the legislative delegation to discuss the company's activities going forward. The company reiterated its willingness to reconsider the proposal at a future time if business conditions warrant.

According to local sources, Gerdau has not closed the door on the plant and it may still reopen. The company does not have any immediate plans to tear down or sell the mill. Any upgrade to the plant would take an estimated two years to complete. Even if the mill did reopen, many of its workers gave up their chance to come back by choosing severance packages. The company offered employees a week's worth of pay for every year of service, up to eight years, in exchange for their rehire rights if the plant reopened. Company officials stated previously that all employees would receive severance packages if the plant were to close permanently.

Despite the steel mill's indefinite idling, Gerdau Ameristeel continues to maintain a strong presence throughout Oklahoma, where it employs more than 100 employees at rebar fabrication locations, recycling plants and railway facilities in Sand Springs, Muskogee, Oklahoma City and Tulsa. In Sand Springs, the company will continue to operate the Sand Springs Railway, as well as its Sand Springs Rail Products and Sand Springs Recycling facilities.

Gerdau Ameristeel is the second largest mini-mill steel producer in North America, with annual manufacturing capacity of approximately 12 million tons of mill finished steel products. Through its vertically integrated network of mini-mills, scrap recycling facilities, and downstream operations, Gerdau Ameristeel serves customers throughout the United States and Canada.

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www.gerdauameristeel.com