The Milwaukee-based Super Steel Products Inc. announced Monday it will shut its railroad car plant off Route 5 by April, putting 175 people out of work.
The company opened the plant in the Scotia-Glenville Industrial Park in 1995.
The news shocked and saddened local officials as well as company employees.
“That is surprising news,” said David Buicko, chief operating officer for The Galesi Group, which owns the industrial park. Buicko was in meetings when Super Steel informed the state Department of Labor Monday afternoon it was shutting down the plant and laying off the entire work force.
Leo Rosales of the state Department of Labor said his agency will provide counseling, training and other benefits to eligible employees. “We want to give them some hope and show them there is life after layoffs,” he said. The state will try to set up a meeting with Super Steel employees as soon as possible, Rosales said.
Lanny Moss, 36, a fabricator/welder at Super Steel, said workers inside the plant had no clue the company planned to close the Glenville operation prior to Monday’s announcement. “They kept telling us they had overtime and all this work,” he said.
He came to Super Steel slightly more than two months ago from Mississippi in answer to an ad. “I hoped to start a new life and relocate here. But now I am seeking employment at another facility,” he said.
Moss described the atmosphere inside the plant as depressing. “I really feel sorry for some of the guys in there who have families and homes to worry about,” he said.
Glenville Supervisor Frank Quinn said Super Steel was a great industry for the town. “They had all these jobs that paid well, and now one of our major employers is going out,” he said.
Super Steel had a payment-in-lieu-of-taxes agreement on the $9 million, 160,000-square-foot building. It owns the building while Galesi owns the land. It is paying full taxes on the property, according to Ray Gillen, chairman of the Metroplex Development Authority. The amount of the taxes was not available Monday.
Gillen said Super Steel will continue to own the building and pay taxes. At the same time, the company is trying to find a buyer for the building, he said.
Buicko said he would work with Metroplex to market the site, saying the building is in excellent shape.
Super Steel spokeswoman Erwin Hartmann said Super Steel was closing the Schenectady plant “due to the dramatic downturn in the global and national economies and a steep decline in orders.” Layoffs will begin Jan. 31 and conclude with the plant’s closing April 3, she said.
“We expect the layoffs to be permanent,” Hartmann said.
Schenectady County Legislator Robert Farley, R-Glenville, said the company was forced to make the announcement because of a change in the state Workers Adjustment and Retraining Notification Act. The act requires employers to provide 90 days’ notice prior to a plant closing, mass layoff or relocation occurring on or after Feb. 1, 2009. The law, which took effect this year, extended the federal notification by 30 days.
The state WARN Act applies to private employers with 50 or more workers who lay off at least 25 employees. Violations are subject to civil penalties and back wages.
Farley said Super Steel had to make its decision based on a “worse-case scenario” for the plant because of the law’s requirements. “They do not want to close it,” he said. “If all of a sudden they get an order, they can reopen. It is unlikely, but possible.”
He said efforts should be focused on helping the families of laid-off workers.
The Business Journal of Milwaukee reported the Glenville plant built $70 million worth of train cars for GM over the years.
Ross Capon of the National Association of Railroad Passengers, a trade association, expressed surprise to hear about Super Steel’s problems. “This is the first I’ve heard of about a downward trend in railroad car refurbishing,” he said.
Capon said it is possible that the industry as a whole could be going along without problem and that individual manufacturers could lose out. “Obviously, there are a lot of financial problems for state and local governments that fund transit agencies. There may be a connection between the two,” he said.
Super Steel is privately held and not obligated to report earnings. However, the Business Journal of Milwaukee reported Oct. 1 the company landed a $22 million contract to assemble 10 commuter railway cars at its plant in Milwaukee. It will deliver the railway cars in February and March 2010.
Buicko said General Motors in Canada was one of Super Steel’s biggest customers. GM is facing bankruptcy along with other U.S. auto manufacturers.
Gillen said the entire transit industry in the United States is in crisis. “We have been in close contact with the company. They had a busy 2008 and they are telling us the locomotive business has collapsed. They have no orders booked in 2009. They do not see a light at the end of the tunnel,” he said.
Besides building rail cars, Super Steel also refurbished them. It did work for transit systems in Buffalo and Long Island and had major contracts with Siemens Transportation Systems and Mitsubishi.
It also had a contract with the state to build seven Turboliner trains for a proposed high-speed rail corridor between New York City and Albany. The state paid Super Steel more than $70 million before ending the project in 2006.
Gillen helped bring Super Steel to Schenectady County when he worked for the state’s Empire State Development Corp. This was prior to his becoming the county’s commissioner of planning and economic development and Metroplex Development Authority chair.
Super Steel received a $400,000 grant from the Empire State Development Corp. to defray interest costs on the $9 million building project and create 140 jobs, a goal it met. The state also paid $1 million to bring a rail spur to the industrial park.
Super Steel then got another $500,000 from the state to increase employment to 240. The company may have to repay some of that money, as it never achieved that goal, local economic development officials said.
The company faced several lawsuits in recent years. In 2007, a former worker at the Glenville plant filed a $1 million reverse discrimination lawsuit against the company in federal court, claiming he was fired because he is white.
Walter Kosloski was one of eight white men the company fired in 2006 after black employees alleged they were harassed by white workers at the plant. The minority employees that year filed a $175 million lawsuit against Super Steel. The company settled with them a year later for $1.25 million.
Super Steel was founded in 1923. It manufactures metal products and equipment for the railroad, construction, agricultural and industrial markets. The company had sale revenues of $100 million and employed 800 people at three plants, Schenectady included, in 2007.