DTE will shut down Shenango coke plant near Pittsburgh in mid-January
Shenango Inc. won't survive the loss of its biggest customer.
The Neville Island coke works that employs 173 will close in mid-January, the facility's owner said in a surprise announcement Thursday, as its main customer AK Steel in Ashland, Ky., began shutting down a blast furnace fueled by Shenango coke.
Michigan-based DTE Energy, which bought the coke works in 2008, said declining demand in the North American steel industry forced the permanent closure of the plant west of Pittsburgh.
DTE has not determined what it will do with the plant or island property in the Ohio River.
“We were blindsided by it this morning,” said Mike Ruane, president of United Steelworkers Local 5032, which represents many Shenango workers. “It's like a funeral here. There is a lot of guys who made a good living here for several years.”
Just a month ago, Ronald Burnette, DTE's director of steel, told the Tribune-Review that the company was committed to keeping Shenango open and investing millions of dollars in the plant. The company spent $22 million on improvements since buying the plant in 2008 and planned to spend $41 million more through 2018, according to a report on DTE's website.
Shenango was securing the final permits for a biological treatment plant to clean waste and stormwater at the plant, and spent $2.2 million this summer to rebuild a coal cart destroyed in a fire.
“The decision to close Shenango has been heartachingly difficult,” Burnette said in a statement. “Unfortunately, global overcapacity in the steel industry and international trade issues have reduced the demand for our product, metallurgical coke. … We simply have no options for keeping Shenango open.”
DTE would not say how much coke it shipped to AK Steel.
The decline of domestic steel has taken a toll on Western Pennsylvania industries. Allegheny Technologies Inc. announced last week that it would idle two plants. U.S. Steel, whose stock has slid from $196 in 2008 to less than $8 this month, said in November that it would not build a headquarters on the former Civic Arena site in Pittsburgh.
Allegheny County Executive Rich Fitzgerald did not foresee Shenango's closure.
“But seeing their announcement, and knowing what's going on in the steel industry, maybe we should have,” Fitzgerald said, adding he and other Western Pennsylvania leaders have spoken about stopping trade agreements that allow foreign steel into the market.
“It's hurting company after company.”
DTE will consolidate its coking operations to a facility in Michigan.
Closing Shenango will affect 173 employees, including 37 nonunion workers, the company said. The employees will receive 60 days of pay after the plant closes and severance packages including compensation, health care benefits and outplacement assistance. They will have preference for DTE job openings.
“Not expected at all,” said Charlie Leonard, a United Steelworkers staff representative who learned about the closure as he went to negotiate a contract for the workers. “Both parties did what was right to make that place a success, and it was taken out of our hands.
“We can make coke profitably and environmentally safe. But we have no customers.”
Shenango has a checkered past related to air pollution and other environmental protection regulations. The county in 2005 ordered Shenango's previous owners to pay a $252,000 fine for repeated violations. DTE agreed to pay $1.75 million in 2012 to settle longstanding air and water pollution complaints. Shenango agreed to pay a $300,000 fine and invest more than $1 million in emission controls as part of a settlement in 2014.
The Group Against Smog and Pollution, a Garfield-based air quality nonprofit, sued Shenango in federal court over emission violations. A judge dismissed the lawsuit.
Rachel Filippini, GASP's executive director, said the organization was surprised to hear Shenango is closing. She said Shenango is one of the county's five largest emitters of air pollutants.
“The plant violates emissions regulations almost daily. The closure is likely to substantially improve air quality in the Pittsburgh region and, by extension, benefit public health,” Filippini said in a statement.
Shenango owes the county about $100,000 in outstanding air quality fines, said Jim Thompson, deputy director of environmental health. It has complied with county air quality regulations in some areas but lags in others, health officials have said.
Fitzgerald said he does not view Shenango's closing as a boon to county health.
“You got 173 people, 173 families that are getting this word,” he said. “What are they going to do in the future?”
Aaron Aupperlee is a Trib Total Media staff writer. Reach him at 412-320-7986 or [email protected].