On May 7, 2009, Severstal International, an operating division of Russian steelmaker OAO Severstal that includes the North American Segment, announced that, as a result of the continued deterioration of economic conditions and a further decline in customer orders, it decided to make several operational changes.
Accordingly, the steelmaking and hot rolling operations at Severstal Wheeling Inc. will remain idled. In addition, the cold rolling and coating operations at Wheeling will also be temporarily idled in the coming weeks while the company balances production with orders across its business.
On February 27, Severstal announced the temporary cessation of operations of the steel galvanizing line at its Severstal Warren Inc. facility. Further to that announcement, all production and finishing operations at Warren will be idled indefinitely until there is an improvement in market conditions.
Meanwhile, Severstal issued a ‘worker adjustment and retraining notification' at its Wheeling and Warren facilities to reflect the anticipated long-term idling of those facilities. As a result of the idling, about 1,900 employees at Wheeling and 1,200 at Warren are now or will be placed on layoff.
Commenting on the operational changes, Severstal International CEO Gregory Mason said, "These are difficult decisions that have not been taken lightly and without careful consideration. Unfortunately, due to the continued deterioration of market conditions across the entire steel industry, they are necessary to ensure the long-term sustainability of our US business. I want to restate our commitment to our employees, their families, and the communities in which we operate. We still strongly believe in the viability of our U.S. facilities and the long-term fundamentals of the US steel industry. We are making our best effort as a company to manage prudently through this downturn so that we are well positioned to maximize success when conditions improve."