Dormant since the end of June, Standard Steel in Latrobe may once again make ingots for the rail industry.
The 116-year-old steel and alloy component plant has been acquired by the West Homestead Engineering and Manufacturing Co., or Whemco, a division of Park Corp., a real estate and manufacturing firm, said James Smith, vice president and director of finance and development for the Economic Growth Connection of Westmoreland.
"It's great news. A plant that was closed is opening. It's a home run," Smith said. He disclosed the deal Thursday during Westmoreland County's third annual countywide economic development seminar.
Smith said the company plans to open the Latrobe plant's melt shop, a move that could put about 75 union steelworkers back to work over the next three years.
Whemco and Park Corp. officials could not be reached for comment yesterday.
Smith said it was his understanding that a new subsidiary, Lehigh Specialty Steel, will be created as the entity to operate the plant and supply ingots to Erie Forge & Steel Co. and Lehigh Heavy Forge Corp., both of which are WHEMCO Group subsidiaries.
Standard Steel, formerly called Latrobe Forge & Spring, shuttered its doors June 30, a move that put 117 steelworkers out of work.
The plant survived a potential closing two years ago when a bankruptcy court in Delaware awarded the assets of Freedom Forge Co., which operated Standard Steel at the time, to an investor group headed by Michael J. Farrell, president of Pittsburgh-based Farrell & Co., for $36.7 million.
At that time, the buyout also kept about 650 jobs in place at the company's forging plant in Burnham, Mifflin County.
Michael Farrell could not be reached for comment yesterday.
Two years ago, Economic Growth Connection assisted Farrell's group in obtaining a $1.25 million loan from the Pennsylvania Industrial Development Authority, which finances loans for land and building acquisitions or construction for industrial and manufacturing projects statewide.
Smith said the Economic Growth Connection is helping Whemco assume about $1.16 million of the original PIDA loan that remains available. "We're also going to look at what other programs may be available," he said.
Escalating raw material and energy costs contributed to management's decision to put the Latrobe plant up for sale in April. At the time, Farrell said the company's exit from the industrial steel ingot business at its Burnham operation in late 2003 also created problems for the Latrobe operation, causing it to lose a substantial, consistent demand for its steel. The plant closed two months later after a buyer could not be found.
WHEMCO's roots trace back to Park Corp.'s acquisition of the former Mesta Machine Co. operations in West Homestead in 1983. Park, through the newly formed WHEMCO Division, decided to reopen the facility on a downsized, restructured basis.
WHEMCO continued the plan of strategic acquisitions followed by optimal redeployment of assets by purchasing the idled Midland steel foundry in 1997, giving the company access in the custom casting business. Park Corp. purchased Duraloy Technologies Inc. in Scottdale in April 1994.
