(The following story by Gloria Irwin appeared on the Akron Beacon Journal website on March 9.)
ALLIANCE, Ohio — The foundry where couplers, yokes and center plates for railroad cars were first made more than a century ago is once again working for the rail industry.
Ohio Gov. Bob Taft will visit the site of the former American Steel Foundries, which closed its 26-acre complex nearly two years ago, to celebrate the opening of Alliance Castings.
Ohio Castings LLC, a consortium one-third owned by billionaire financier Carl Icahn, used $12 million in loans, grants, bonds and other incentives from the state to buy the complex. The consortium put in an additional $5 million in working capital to upgrade machinery.
The restarted foundry, which had been closed since April 2002, poured its first sample heat, or batch of molten steel, in December, General Manager Larry Stewart said. After testing and approval of the Association of American Railroads, production of sideframes and bolsters began in January.
Current employment stands at about 240, which includes 32 administrative positions, Stewart said. As production goes into full swing, another 160 or so workers will be added, he said.
For Alliance, long known as a manufacturing town, the new operation brings back solid jobs.
“This facility touches the heart of the community,” Alliance Mayor Toni Middleton said, because the city was founded on the railroad industry.
As an incentive to persuade Ohio Castings to buy the old American Steel foundry, Middleton helped arrange a 50 percent rebate on income taxes the company pays to the city on behalf of employees.
In the early ’90s, American Steel had about 1,400 unionized workers on the payroll there.
Prices for the bolsters and sideframes that make up the underpinnings of rail cars had fallen from $5,500 to $3,750.
And demand was as soft as prices. In 2002, the rail industry bought only 17,000 car sets.
Last fall, as both rising prices and demand signaled the industry’s recovery, the Alliance foundry, first built in 1902, got a new owner.
The number of employees had dropped below 300 by the time the foundry closed, Alliance Planning Director Vincent Marion said.
Putting 240 people back to work is a significant improvement for the city, Middleton said.
“Alliance has been looked down upon for generations, and regrettably so,” he said, acknowledging the city is “a low- and fixed-income community. That’s the fact.”
Middleton said that when first elected, he set out to market the city and highlight its position as a hub for Stark, Mahoning and Columbiana counties.
Alliance competed with four cities and Mexico for the foundry jobs, Marion said. The city gave up 50 percent of its income tax from foundry workers for 10 years in return for the jobs.
Stewart said about 95 percent of the work force consists of American Steel veterans, even though the foundry had been closed for so long that laid-off workers lost their recall rights.
Alliance Castings asked the Employment Source in Canton to conduct its job screenings, Stewart said.
The foundry has exceeded its startup goals, Stewart said, and he credits workers for that accomplishment.
The foundry was expected to be able to pour four heats a day by the first of June, Stewart said, but workers will reach that goal by April 1.
Long-term, the foundry expects to pour six to seven heats a day and produce 10,000 sets of bolsters and sideframes a year, Stewart said.
Production Manager Ron Evers said employees’ attitudes are “fantastic. They’re very happy to be back and to make all the products we can make.”
Joe Holcomb, servicing staff representative for the United Steelworkers of America Local 2211, said the union negotiated a new contract with Alliance Castings. The agreement reduces the number of job classifications from 21 to four and contains lower wage scales and new health plans.
“It’s a lot better pay scale than working at Wal-Mart,” Holcomb said. Laborers are paid $10 an hour, skilled workers get $12 and incentive jobs pay $12 to $15 an hour.
He said workers’ morale is good, even though they’re still adjusting “to things not being American Steel.”
“We’re going to go forward,” Holcomb said.