Weeks after gaining power at Birmingham Steel Corp., Birmingham, Ala., new CEO John Correnti has announced that the company will suspend operations at the company’s Memphis, Tenn., melt shop.

Operations at the two-year-old facility, which employs 250 people, were suspended indefinitely at the beginning of January. The facility produced billets for Birmingham Steel’s special bar quality (SBQ) rolling mills in Cleveland.

“The Memphis facility has been plagued by a series of issues, including poor management, high employee turnover and equipment problems,” says Correnti. “During this prolonged period of start-up, Birmingham Steel has expended significant financial resources to support the cash drain incurred by Memphis, which has been a major reason for the dramatic increase in the company’s debt,” he adds. Reports also indicate that the company owes $300 million on a direct reduced iron (DRI) facility.

According to Correnti, the Cleveland rolling mills will continue to operate using billets supplied by Birmingham’s Cartersville, Ga., facility and by “qualified third-party suppliers.”

Correnti, a former executive with Nucor Corp., Charlotte, N.C., assumed control at Birmingham in early December of 1999 after waging a campaign to gain shareholder support heading into Birmingham Steel’s December 2, 1999 annual meeting of shareholders.

On the morning of the day of that meeting, a “settlement” was announced that effectively resulted in a takeover by Correnti, who along with eight other members of what was called the “United Company Shareholder Group” gained seats on a revamped Birmingham Steel Corp. board of directors.

The United Group had spent several weeks waging a very public campaign to convince Birmingham Steel shareholders that the company would be better served if former chairman and CEO Robert A. Garvey stepped aside in favor of Correnti and other United Group members.

Garvey headed Birmingham Steel for just three years, but had previously been president of North Star Steel, Minneapolis, and spent more than two decades with Laclede Steel, Alton, Ill.

Correnti and the United Group pointed to the Memphis melt shop project as the greatest weakness of Garvey’s tenure. In an interview with American Metal Market, Correnti referred to the Memphis plant as his “number one, number two and number three problem,” noting that the plant had never come close to producing at its engineered capacity.

Ironically, during Correnti’s own tenure at Nucor Corp., the steel mini-mill company was involved with a notable white elephant: the failed iron carbide facility in Trinidad.

BALTIMORE’S SHIP COMES IN

Military ship breaking activity has returned to the Baltimore area with the scrapping of the USS Patterson at the Baltimore Marine Industries (BMI) shipyard in Sparrows Point, Md. The six-month project is being hailed by Maryland politicians as a positive step toward bringing shipbreaking back to American shores and, some claim, back to a higher level of environmental responsibility.

Although shipbreaking has taken place in Baltimore this decade, it was the subject of an investigative series by the Baltimore Sun newspaper, which reported several environmental violations. Shipbreaking activities in Asian nations have also come under scrutiny for environmental and safety reasons.

“We shouldn’t be exporting opportunities for misery,” says Maryland Senator Barbara Mikulski. “Instead, we should develop safe, efficient ways of breaking ships in the United States.”

A pilot program of the U.S. Navy and other federal agencies has chosen Baltimore and three other U.S. ports—Philadelphia, San Francisco, and Brownsville, Texas—as destinations for ships that will be scrapped with more direct supervision and monitoring from the Navy than has occurred in years past.

Some 200 workers at the Maryland shipyard where the USS Patterson is being dismantled are taking part in the shipbreaking project. The owners of the BMI shipyard hope that a good performance in the pilot project will open up the possibility of more ships coming to Baltimore—perhaps even a contract to scrap up to 100 vessels.

In other shipbreaking news, a contract to dismantle and dispose of an inactive U.S. Navy ship has been awarded to Ship Dismantlement and Recycling Joint Venture (SDR). SDR is a joint venture between Earth Tech Inc., a subsidiary of Tyco International Ltd., Exeter, N.H., and Ship Dismantlement and Remediation Inc., a subsidiary of VSE Corp., Alexandria, Va.

The contract is worth $3.7 million and is among those awarded by the Navy under its pilot program to develop “environmentally sound ways to dispose of excess Navy ships.” If the program is successful, SDR is expected to bid on scrapping other ships as well.

“We decided to enter into the ship breaking business about two years ago when we saw the need to develop environmentally sound and cost effective methods to dispose of inactive U.S. Naval ships,” says Don Ervine, VSE Chairman and CEO.

 OHIO FOUNDRY TO CLOSE

The Ironton Iron Inc. foundry in Ironton, Ohio, will be closing in early 2000. The plant, with an annual capacity of 98,000 tons of ductile iron parts, is owned by Intermet Corp. of Troy, Mich. The facility was one of the largest ferrous scrap-consuming foundries in the Midwest.

According to an Intermet news release, the foundry has had “enduring financial losses” and is currently operating at 50% capacity. Some 600 people will be laid off at the plant, located in west central Ohio. “Intermet has been working for years to make this plant efficient,” says Intermet group vice president James F. Mason. “We invested over $100 million in the plant and lost every penny of it, and more. "