German Firm to buy two idled U.S. steel plants

German Firm to buy two idled U.S. steel plants. A German company is buying two idled Hamilton steel plants in a deal that could mean 300 new jobs for the city. The sale of the No. 1 bar mill and No. 3 bloom and billet mill at U. S. Steel Canada's Burlington Street complex will mark the North American debut of Max Aicher Group, a German company that already commands more than 20 per cent of Europe's market for automotive steel. "This is a very significant announcement. It's a major reinvestment in Hamilton," said economic development director Neil Everson. "This is job creation, it's advanced manufacturing and it shows steel still has a future in Hamilton." Terms of the deal were not disclosed and government approval is required. The mills have been inactive since January 2009, when U.S. Steel idled almost all of its Canadian operations in the face of plunging demand, moving production of flat-rolled steel to the United States. The Hamilton bar and bloom mills were the only such facilities in the company's portfolio and, in announcing the sale, the company said they didn't fit with its future plans. This isn't the first time the Aicher group has considered investing in Hamilton. In 2007, Stelco managers offered the mills for sale as part of an effort to make the post-bankruptcy protection firm more attractive to investors. "One Wednesday, Rodney Mott (Stelco CEO in 2007) told me the sale was going to be approved by the board the next day, but it never happened," said Rolf Gerstenberger, president of Local 1005 of the United Steelworkers. Aicher made at least two more approaches to Stelco and U.S. Steel, but a deal was never finalized. "What they told me back then was they wanted to build a steel mill next to the Stelco facilities and finish the bars there," Gerstenberger said. "They have a good market in North America, but it was getting too expensive to ship steel here." Gerstenberger said, when the mills were closed last year, they employed about 300 people. On U.S. Steel's current roster of 850 employees, about 100 have contract rights to jobs in the closed facilities. Aicher's new Canadian employees will remain members of Local 1005. "Aicher would need all of them and many more," Gerstenberger said. "They'll need 300 people right away to start production." Gerstenberger said the mills are generally in good condition and crews were in recently to start up production machinery for test runs. Local leaders praised the sale as welcome news for a city hammered by two years of steady job losses and plant closings. "They're going to manufacture some high-value specialty steel products there," Everson said. "These are going to be living wage jobs and more. "This is a really, really strong win for Hamilton," he added. "We've had our losses, but we're starting to get wins, too." Mayor Fred Eisenberger said he hasn't been given all the details on what the Aicher group is planning, but welcomed any investment that promises good jobs for the city. "There's going to be a significant number of jobs attached to this," he said. "Three hundred sounds like a reasonable number. It's not going to be a small number." In a news release, Eisenberger described the announcement as "the culmination of months of behind-the-scenes work" led by the economic development department along with senior staff from the city's public works, legal and planning department and the Hamilton law firm of Scarfone Hawkins LLP. The announcement was "yet another great example of the return on investment that council made in increasing the budget and resources to our economic development efforts," he added. Richard Koroscil, chairperson of the Hamilton Chamber of Commerce, welcomed the prospect of new jobs. "This is going to be advanced manufacturing kind of work, it's exactly the kind of thing we want to see more of in Hamilton," he said. Max Aicher (North America) Inc. is a wholly owned subsidiary of Max Aicher GmbH & Co. KG of Germany. Based in Freilassing, Germany, east of Munich, the company has interests in real estate, construction, steel and waste recycling. It entered the steel business in Germany in 1975, rehabilitating the bankrupt Stahlwerk Annahutte mill in the town of Berchtesgaden. It now operates several stainless steel and rolling mills in Germany, Czech Republic, Romania and Hungary serving customers in auto production and construction. Aicher employs about 2,500 people in steel production now. Blooms are large blocks of steel that are then rolled into billets used to produce wire rod, bars and seamless pipe. Flat-rolled steel slabs are rolled into sheets.