BY ANDREA HOLECEK, Times of Northwest Indiana
holecek@nwitimes.com
CHICAGO HEIGHTS | The 14-inch bar mill rolled billets into strips of steel up to 540 feet long Thursday, just another work day at a local rolling mill that rose from the remnants of a bankrupt steel company.
CaluMetals has been open for more than a year and "is doing well," said Frank Di Falco, its general manager and vice president. The company occupies the major portion of the former Calumet Steel Co. site, and its owner, Michael Goich, leases space to other steel-related businesses.
When Calumet Steel Co. filed for bankruptcy, claiming to be forced out of the business by low-cost imports, it would have been hard to imagine the plant ever again would be the hub of activity it was in the past. Its bankruptcy followed the path of more than 40 other steel companies filing Chapter 7 from 1999 to 2002 after being besieged with competition from steel products imported at prices lower than the cost of U.S. production.
But changes in market dynamics, precipitated by China's steel demand, renewed the U.S. steel industry in 2004 and turned the cyclical business' economics upside-down.
When Calumet Steel -- a minimill that produced steel bars and light shapes consumed by the agricultural, construction, lawn care and automobile industries, plus industrial machinery for manufacturing industries -- closed in March 2002, about 200 employees, mostly steelworkers, lost their jobs.
The 47-acre site east of State Street and north of Joe Orr Road was acquired in November 2002 by MZG Associates LLC, owned by Goich for $2.6 million in a bankruptcy court auction. Goich, of Lansing, also owns and operates LB Steel LLC, in Harvey, and Coburn Steel Products, in Riverdale.
In May 2004, the CaluMetals mill began operating in spurts and was going "full bore" by January 2005, said Di Falco, a bulldog of a steel man who immigrated from Sicily to the East Coast as a child and earned his mechanical engineering degree from the New Jersey Institute of Technology.
"Mike owns the company; I was brought in to run it," Di Falco said.
The mill currently has 36 employees, including office staff, and operates only one shift. More people are being hired for a second shift run, but Di Falco said finding qualified employees remains one of his biggest challenges.
The government is to blame for schools that don't produce graduates with basic math and reading skills, Di Falco said. And, he said, it also is to blame for other problems in U.S. manufacturing, including the lack of universal health care, bad or unenforced trade policies, and soaring energy costs.
CaluMetals has a nonunion work force guided by the company's philosophy, Di Falco said. Employees are compensated according to their talents; if they do the job today, they'll have one tomorrow; they have a right to be treated fairly, and a right to appeal if the feel they're not.
The company's melt shop, where steel scrap is made into billets, remains closed. Di Falco hopes it will be reopen in the near future, but -- after being idle for three years -- it will take a large capital investment to return it to operating condition, he said.
Instead, CaluMetals buys semi-finished 1,000-pound billets on the open market to produce the specialty and merchant hot-rolled bar products it sells to a variety of industries, including transportation companies, industrial chain manufacturers, service centers and utility companies.
The other businesses operating on CaluMetals' property have made the site a "mini" steel center.
Jim Bush, owner of American Eagle Steel, said he moved his business there from South Holland during the summer because of its convenience. American Eagle is a distributor of hot rolled bars used in the forging industry, and the bolt and hydraulic shafting industries.
"It's in a growth pattern," Bush said of the facility. "Everything's in use but the caster and a couple of buildings."
Northern Industries, which presses plate and distributes it to steel service centers, relocated to the facility from Crestwood. The company had planned to move to Indiana, but it received incentives from Illinois and a tax incentive from Cook County to remain in the state.
Chicago Heights Mayor Anthony DeLuca said the site is really booming now, and there are plans for more expansion. Bringing Northern Industries to Chicago Heights "is a testament to the aggressive stance the city and state took to land it here."
"It's almost an industrial park there," he said. "It provides jobs. It's a huge factor for the city to get employment, increase its revenue and simulate other business."