Hundreds to be laid off, as EVRAZ Claymont Steel idles operations

By Amy Cherry/Peter MacArthur 10:23am, October 14, 2013 - Updated 8:09pm, October 14, 2013
With demand for its products down, EVRAZ says it's suspending operation at its plant in Claymont.

WDEL's Amy Cherry reports.

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375 workers will spend the next two months processing and shipping existing orders, then they will be laid off.

"Obviously, incredibly disappointing for the couple hundred Delawareans who work there and their families, I mean these are very good jobs," says Gov. Markell.

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Work done at the Claymont plant will be be shifted to EVRAZ facilities in Portland, Oregon and Saskatchewan. The company says all but a handful of workers will be gone unless and until business demand picks up.

"Unfortunately, this industry is very challenging, and there's very cheap imports coming in from overseas," Markell says.

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Markell says he's working with EVRAZ to evaluate options in hopes of fully restarting operations at that site.

"We're going to work as best we can with the company to forge a better path, but it's not immediately clear what that is," Markell says.

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The job losses come just days after Georgia-Pacific announced it would close its Color-Box plant in Harrington, laying off nearly 100 Delawareans.

U.S. steel expert and author Peter Warrian tells WDEL News he's not surprised by EVRAZ's decision.

"Steel mills are really capital intensive so unless you've got capacity utilization around 81 or 83 depending on the product line, you can lose a lot of money in a hurry, so the whole North American industry is at about 77.8, so they're underwater," Warrian says.

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He says there are two exceptions.

"The two bright spots are automotive and energy, but if you're not in that sweet spot, your company's bleeding cash," says Warrian.

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Warrian says steel consumption is growing. He points to steel even being found in the iPhone. But he says the industry simply doesn't employ as many people as it used to because productivity has grown so much.

A state lawmaker whose district includes Evraz Claymont Steel says he's reaching out to those affected by the layoffs to encourage them to use state services.

State Rep. Dennis Williams says there are state resources that will be available to those who work at the steel mill.

"Un employment benefits, and they can sign up through the Department of Labor, and we can help facilitate that, but if there are other services that are necessary, we can try to direct people to appropriate department in the state," says Williams.

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Williams says he was shocked to learn about the layoffs because Evraz had made significant investments into its Claymont facility.

"Most recently, they spent $17 million on a new baghouse to cut down on the dust. They were optimistic that they would be able to continue, but it's really worldwide economic conditions and the demand for the steel that they were making," says Williams.

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In April, Evraz Claymont Steel announced the layoffs of 60 workers.

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