• Georgetown Times
  • Waccamaw Times
  • Inlet Outlook

Georgetown Steel worker talks about Bain Capital, working conditions

  • Thursday, January 12, 2012

  • Updated Thursday, January 12, 2012 8:26 pm

Gov. Rick Perry’s accusations against former Gov. Mitt Romney in the Republican Presidential selection process have brought national attention to the former Georgetown Steel mill.
Perry termed Romney’s involvement in investing money in troubled businesses “vulture capitalism.”
The Georgetown Times asked some people who’ve worked at the steel mill about their thoughts.
One such steel worker is David Harper.
He started working for the Korf Industries-owned plant in 1970 when the rolling mill opened up. Despite an injury in 1984, he continued working for the mill until 1987 when he went out on disability. Over the years, Harper has continued his connection with current and former co-workers.
“I don’t remember any comments about Bain Capital,” Harper said Wednesday.
That company, founded by Romney and others, bought Georgetown Steel about 1998 from Kuwaiti investors. The local mill merged with a GST facility in Kansas City, and the name was changed to GS Industries.
Later the Kansas City mill closed, and some of its equipment was moved to Georgetown but not put into service.
In February 2001 GS Industries filed for bankruptcy. Daniel K. Thorne and his Midcoast Industries bought the local mill in July 2002 for $53 million.
The company filed for bankruptcy and closed in October 2003. The 465 employees who worked there were out of work.
Along the way, Thorne successfully sought a reassessment of the value of the mill by the state Department of Revenue. With that ruling, the book value went from $35.9 million to $83,871. The land kept its value of $19.36 million.
In June 2004, International Steel Group (ISG) bought the plant for $20.4 million. When it opened back up, there were 276 workers employed.
In early April 2005, ISG co-founder Rodney Mott left the company. He had exercised stock options for $40 million. As he took advantage of stock options and a severance package, Mott expected to get about $60 million for his ISG shares.
Later in 2005, Lakshmi N. Mittal formed Mittal Steel and bought ISG. That was part of a $4.5 billion deal. By June 2006, employment was up to 320 people. In mid-2006, Mittal and Arcelor merged to form ArcelorMittal. The world-wide company is the largest steelmaker in the world.
After the mill was closed for about 13 months, Harper said, the layoffs “were like a roller-coaster thing for awhile.”
Part of the reason for the ups and downs was due to shifting some steel orders overseas, Harper said.
He added that there were rumors that Thorne — an environmentalist — bought the mill in order to shut it down.
That was never proven, and Thorne denied it.
Nowadays, Harper continued, a lot of the workers he talks with tell him “Nobody likes the way the plant is being run.”
The union gave up the “line of progression” and now employees can be assigned to work anywhere in the plant, rather than in a specific job.
“Morale at Georgetown Steel [ArcelorMittal] is low. People are there just to make a paycheck,” Harper said. “They want to keep it running, but morale is low,” he said.
“I understand they are selling everything they can make.” And, he continued, the mill is working three shifts a day, though the rolling mill is closed on weekends.
During the years he worked at the mill, David Harper served as treasurer of Local 7898 of the United Steelworkers of America.
“I remember when there were over 1,300 people working the mill.” Now that number is down to about 300 workers.
“A lot of the cutbacks are due to automation. They seem to be running it OK,” Harper said.

vvv

During appearances on Fox news channel Wednesday night, Newt Gingrich, Rick Santorum and former candidate Herman Cain all indicated that they support capitalism, including venture capitalism, and seemed to be backing away somewhat from the strong words used by Perry.

By Tommy Howard
thoward@gtowntimes.com

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