Tulsa World: Steel mill could be reopened by 2012

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Steel mill could be reopened by 2012
Gerdau Ameristeel and government officials are in talks about the Sand Springs plant.

By NANCY HOLLINGSHEAD World Staff Writer
Published: 11/28/2009 2:26 AM
Last Modified: 11/28/2009 4:50 AM

State and Sand Springs officials confirmed a report by Bloomberg News Friday that Gerdau Ameristeel is considering restarting the steel mill it idled Oct. 18.

Bloomberg reported that Gerdau is in talks with Oklahoma government officials to restart the Sand Springs mill, citing comments made by Gerdau CEO Andre Gerdau Johannpeter at an event in Sao Paulo, Brazil, where the company has a plant.

More than 200 employees, many of them members of the United Steelworkers union, lost their jobs with the area mill's closing. Only a small maintenance crew of about 30 remains at the plant.

State Rep. Lucky Lammons (D-Tulsa) confirmed a meeting was held several weeks ago that included Sand Springs City Manager Doug Enevoldsen, a representative from Speaker of the House Chris Benge's office and four representatives from Gerdau — including the Sand Springs plant manager and three others who flew in from Gerdau's Florida headquarters.

The meeting, which lasted about two hours, was held in Enevoldsen's Sand Springs office, Lammons said.

"We're still trying to work with incentives such as the Quality Jobs Act, and the creation of a TIF (tax increment financing) district would do away with some taxes they would have to pay," he said.

The state Quality Jobs Act offers a rebate on payroll taxes for adding employees. Some "tweaking" of the act may be needed for Gerdau, officials have said.

Lammons noted the plant was looking at a $100 million upgrade 16 months ago "when everything (the economy) went south."

He said the original retooling was to include the replacement of the operational burners, which melt the scrap metal.

The burners, the lawmaker said, "are at least 40 years old and are obsolete."

While some may have thought the plant's closing meant negotiations had ended, Lammons said communication has continued between the state treasurer, the governor, the Department of Commerce, Tulsa County and Sand Springs officials.

"It's a long way to meet the goal of reopening the plant, but it's something everyone in the state, county and city is committed to — to continually meet and discuss negotiations, and if it's possible, to retool and reopen in 16 to 20 months," he said.

Lammons admitted meeting the goals will be hard because of the health of the state's economy, which is a billion dollars short this year.

"It's a long ways away," he said. "It (an incentive plan) still is in negotiations, and still has to pass the Legislature."

Lammons said legislation must be prefiled by Dec. 11, and the actual language of the measure, which he is unsure of at this point, has to be presented to the House staff by Dec. 29.

He said any negotiations with the union "are between the steel union and Gerdau."

Just before the plant was idled, members of the union agreed on a plan in which workers who requested a severance package forfeited their recall rights, or the guarantee of being rehired if the mill reopens.

They still would be able to reapply if the facility is revived.

Lammons said he doesn't feel it is Gerdau's objective to bust the union.

Sand Springs City Manager Doug Enevoldsen confirmed the meetings have continued in earnest.

"I will corroborate the fact that there are ongoing negotiations between state and local government with Gerdau corporate officials, the goal of which is to ensure that the Sand Springs steel recycling mill will be retooled and emerge as a world-class facility that will operate for decades to come," he said.

"In respect for our colleagues at the state level and their processes, we have agreed not to discuss the specific components of any type of incentive packages that we are attempting to fashion. Gerdau has been a terrific corporate citizen for our community, this region and this state, and we are committed to doing everything in our power to ensure that those quality jobs we've lost are returned."

A decision on the plant may not occur before mid-2010, the city manager said.

Enevoldsen said that once a determination is made, his understanding is that retooling would take about 24 months, "at which time there would be around 200 to 300 jobs created in the area."

The Sand Springs mill traces its history back to 1917. For many years it was known as Sheffield Steel until being taken over by Tampa, Fla.-based Gerdau.

The plant employed 370 as recently as June 30 and its 2009 payroll was estimated at $19.3 million.

But Gerdau began layoffs at the plant in mid-September and later announced its intention to idle it.

Nancy Hollingshead 581-8363
nancy.hollingshead@tulsaworld.com By NANCY HOLLINGSHEAD World Staff Writer

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Some reader comments for this story were copied from "Talks continue to revive Sand Springs steel plant," which was published on 11/27/2009.

	Report Comment notyourfriend, (11/27/2009 6:59:17 PM) Now if we could just get rid of that pesky minimum wage.
	Report Comment WhereIsThought, Raleigh (11/27/2009 11:34:52 PM) I still think it's amazing this place survived the 80s, and with Chinese steel flooding the market, it's amazing that they're actually trying to keep it afloat. I don't know much about the current situation, but this steel mill kept my dad employed for over 40 years, so I'm grateful for that.
	Report Comment jeffery581, okc (11/28/2009 7:10:42 AM) Just import it from China.
	Report Comment JR, (11/28/2009 8:10:11 AM) Give them the breaks... EMPLOY LOTS OF PEOPLE PLEASE..... How do you expect to increase state revenue??????? NOT WITH TAX INCREASES PLEASE....
	Report Comment WhereIsThought, Raleigh (11/28/2009 2:11:52 PM) Absolutely, JR. Don't take any more money from your pocket. It's that kind of thinking that prevailed when Tulsa decided not to build a ball park for the Tulsa Oilers and we got stuck with the Drillers. Think of the long term difference THAT selfish decision made for the city.
	Report Comment 007, Tulsa (11/29/2009 1:10:42 PM) "The state Quality Jobs Act offers a rebate on payroll taxes for adding employees. Some "tweaking" of the act may be needed for Gerdau, officials have said." Ya think?????????????????
	Report Comment 007, Tulsa (11/29/2009 1:12:37 PM) "Lammons said he doesn't feel it is Gerdau's objective to bust the union" No, he just wants to spank them really really hard.

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