WARREN - Facing what it called an "uncertain economic outlook" in the steel market, RG Steel LLC said Tuesday it is cutting wages and some benefits for salaried and other non-union workers.
The announcement, part of what the steelmaker called an acceleration in its efforts to cut operating expenses and cost of goods sold, will affect about 140 workers at the company's Warren mill.
Roughly 830 workers represented by United Steelworkers Local 1375 won't be affected, the company said.
Company President and Chief Executive Officer John Goodwin said the company expects the wage and benefits cut to be restored in the not-too-distant future.
He said the company has made "tremendous progress toward improving our cost structure, especially at our Sparrows Point facility" since the company began in March 2011 with the purchase of Sparrows Point, Md., near Baltimore, and Wheeling, W.Va.-based Wheeling-Pitt, along with Warren.
"However, given the uncertain economic outlook, we have decided to accelerate our efforts to strengthen our long-term competitive position aimed at further reducing our costs," he said.
Goodwin said the steel industry has shown occasional signs of improvement, but "the fact is the economy and the steel industry have been unable to sustain a meaningful recovery. These cost reductions efforts, while difficult, are needed to ensure that our cost structure is appropriate for today's business conditions and that our operations are competitive."
RG Steel spokeswoman Bette Kovach said the company also is pursuing other cost improvements, including boosting steel throughput, fine tuning processes and finding other sources for the goods and services the mills need.
Darryl Parker, who was installed Tuesday as president of United Steelworkers Local 1375 at the Warren plant, said no one from the company has contacted him to ask for anything. He said his members already are below the pattern wage structure for major steelmakers.
An uneven economy, plus rising raw material prices, pushed the company into financial straits last year before Cerberus Capital Management L.P. pumped a reported $100 million into the company.
The cash crunch caused the company to idle its Sparrows Point furnace Dec. 22, although the Warren mill continued to operate.
Meanwhile, RG Steel said it refiled its $100 million-plus lawsuit against Severstal in New York state court the day after withdrawing it from federal court in New York.
The suit, originally filed March 30, centers on a dispute over the mills' valuations and liabilities in the $1.2 billion deal.
A unit of The Renco Group Inc., RG Steel employs about 6,000 union and roughly 500 salaried workers. It said it's the nation's fourth largest steelmaker with annual capacity of 7.5 million tons.