Hamilton Specialty Bar, a local steel mill that’s been in business for more than 100 years, is now in receivership and looking for a buyer. If a new buyer isn’t found in the next few weeks, 220 employees will be out of work.
The plant melts scrap metal to make different sizes of round steel bars, mostly for car manufacturing. Its history goes back to 1910, when it began as Canada Steel Company and rolled steel for railroads. Last Monday, the company was put into receivership and a trustee took over.
In 2007 the company was sold and renamed Hamilton Specialty Bar. Workers took a pay cut so more of them could keep their jobs, though they eventually got their wages back. But it came as a shock last week when workers were informed about the company’s receivership.
“We were told that after Christmas they were gonna be back full blast January 2nd. We got word they were not going to start up because of the cash flow problem.” Mickey Mercanti, union leader.
Today the plant looked idle, but it has been operating again since the trustee took over. Workers are told there are four weeks worth of work to complete customer orders, after that there’s either a new buyer or the mill shuts down. The retirees, about 400 former workers, have already lost their medical benefits. The company has been borrowing from its main creditor, Wells Fargo, since 2008.
“The company owes $30-40 million and over the past five years has failed to meet their debt obligations on several occasions.” Marvin Ryder from DeGroote School of Business says Steel Bar has been a tough market in the past couple of years, there’s been more supply than demand.
The union says it’s looking for a buyer for the business and has a couple of possibilities lined up. On Thursday a judge is expected to approve the sale process in court. The deadline for bids on the company is January 26.
