In yet another casualty of the struggling steel industry, DTE Energy Corp. said on Thursday it will close its Shenango Inc. coke plant within the next month, leaving 173 workers looking for other work.
The Detroit-based energy company said in its announcement that it decided to close the Neville Island plant, which produces blast furnace coke and related products for steelmaking, “in response to a sharp downtown in the North American steel industry.”
“The decision to close Shenango has been heartachingly difficult,” said Ronald Burnette, director of steel for DTE, in the release. “Unfortunately, global overcapacity in the steel industry and international trade issues have reduced the demand for our product. ... We simply have no options for keeping Shenango open.”
Charles Leonard, staff representative for the United Steelworkers union, said the workers are in shock. He and other union officials were notified of the closure Thursday morning as they sat down with company officials to negotiate a new contract.
“Nobody saw it coming, even as recently as when we set the date for this meeting,” Mr. Leonard said. He portrayed the closure as a victim of cheap vehicle imports from China, describing the Shenango plant as a place where both company and employees worked together to improve efficiency.
“The union changed the culture of work in order to be more productive, and the company committed and has invested millions of dollars into the plant. Both parties were doing what they should have been doing,” Mr. Leonard said. “Imports from China just took away 173 good middle-class jobs.”
As of late Thursday afternoon, he added, “We’re still talking with them as the day goes on to get more information and begin negotiations” for the plant shut-down process outlined in the collective bargaining agreement.
DTE Energy operates electric and gas utilities in Michigan and develops products and services for energy-intensive industrial customers.
The Shenango plant is one of 69 projects in 17 states operated by DTE’s Power and Industrial Projects group. The company’s website touts recent financial growth in that subsidiary, showing annual earnings jumping from $38 million in 2011 to $90 million in 2014. Over that span, annual revenue has grown $1.1 billion to $2.3 billion.
Companywide, DTE Energy reported third-quarter earnings of $252 million, or $1.40 per share, up nearly 40 percent from the year-ago earnings of $181 million, or $1.02 per diluted share. Also on Thursday, DTE reaffirmed its outlook for next year of earnings per share ranging from $4.80 to $5.05, up from the 2015 earnings per share of $4.65 to $4.91.
DTE Energy said it will close the plant by mid-January. Affected employees will remain on the company payroll for 60 days after the plant closes. The company will then offer severance packages including compensation, health care benefits and outplacement assistance, the release said.
The coke works, which was purchased by DTE Energy in 2008, has come under fire from Allegheny County officials and others for its environmental record. It has failed to meet county emissions standards and faces an investigation from county health officials on its use of emergency flares.
DTE Energy built a $1 million treatment system to clean runoff from its coal pile. In an October filing, it said it planned to spend an additional $15 million “over the next few years” to upgrade the treatment technology.
Hollie Geitner, a spokeswoman for the company, said DTE Energy Services will facilitate interviews for open positions throughout its network where skills and interests align. Ms. Geitner said the closure is part of DTE Energy’s consolidation to a larger, more efficient facility in Michigan.
Daniel Moore: firstname.lastname@example.org, 412-263-2743 and Twitter @PGdanielmoore.
First Published December 17, 2015 2:55 PM