Hiring at new Granite City coke plant raises questions -- and hope -- for laid-off steel workers
This article first appeared in the St. Louis Beacon, June 11, 2009 - Word that SunCoke Energy has started the hiring process for its new coke-making facility that is nearing completion in Granite City could mean little -- or everything -- to more than 2,000 workers laid off from the idled U.S. Steel plant next door.
While SunCoke's projected hiring of about 100 workers is good news to the hard-hit local manufacturing industry, the real glimmer of hope -- or question -- is in the 15-year contractual agreement that has U.S. Steel buying the coke and steam produced at the Gateway Energy & Coke Co. facility, which is slated to begin operation this fall.
The big question: Will the U.S. Steel plant be operating in some capacity by then to make use of the coke and steam?
In response to an inquiry from the Beacon, Erin DiPietro, senior public affairs representative for U.S. Steel, said, "Market conditions, not the delivery of products and by-products from Gateway Energy & Coke Co., will determine when steel production resumes at Granite City Works."
In the meantime, Thomas Golembeski, a spokesman for Sunoco -- the parent company of SunCoke -- confirmed that hiring has started.
"We have already started interviewing candidates for a variety of positions,'' Golembeski wrote in an email. "We expect to fill approximately 100 positions, which will include about 70-80 hourly operations and maintenance jobs.''
According to Golembeski, construction is about 75 percent complete on the facility that includes heat-recovery ovens capable of producing about 650,000 tons of screened blast furnace coke annually.
He confirmed that the project is "currently on schedule to produce coke and steam in the fourth quarter of 2009" and that the coke "will be sold to U.S. Steel under a 15-year contract. The coke facility will also supply steam to a new cogeneration plant that will be built, owned and operated by U.S. Steel.''
In response to a question about how the idling of the U.S. Steel plant could affect the project, Golembeski wrote: "U.S. Steel has indicated that they will be ready to accept coke and steam upon start-up of our operations. More detailed questions on the status of U.S. Steel operations should be directed to their public affairs office.''
Impact on local steelworkers?
Dave Dowling, a spokesman for local United Steelworkers, said the union is aware that SunCoke is interviewing prospective employees and plans to start training this summer. Dowling said the hiring has no direct impact on the union's members, except that some laid-off members are applying for the jobs at SunCoke. He described the jobs as good manufacturing positions at a decent rate of pay.
The crucial question, Dowling agreed, is what implication SunCoke's startup has on the idled U.S. Steel plant.
"If they [SunCoke] make coke in October the question is, for what purpose? Where's the coke going to go? Is it just going to go on the ground? Is it going to go to U.S. Steel because U.S. Steel is up and running? Are they going to find a market for it someplace else in the country or in the world? That we don't know," Dowling said.
Still, Dowling called the SunCoke hiring a positive sign that the project is moving forward because it could provide an edge to U.S. Steel's Granite City Works, should the steelmaker decide to restart a blast furnace at one of its idled plants. The hope is that the company would want to take advantage of the cost-efficiencies resulting from the new coke and energy co-generation project.
"There has been an uptick in orders for steel. If that uptick continues, eventually U.S. Steel will be in a position to start up another blast furnace to start producing molten iron. Right now, the question is which plant,'' Dowling said.
Dowling said that union has a strong interest in reaching out to SunCoke workers.
"Once they have employees, we'll be trying to contact those employees and talk to them about the benefits of having a collective bargaining agreement and being a member of the U.S. Steelworkers," he said.
The hiring process has started
SunCoke, which is headquartered in Knoxville, Tenn., has worked to develop low-emission and heat-recovery technology. In on-line ads, the company has been advertising for machine operators, maintenance and product technicians and utility workers at the new Granite City facility. Jobseekers are directed to send resumes to the Career Services Department at Ranken Technical College.
Susan Flayer, director of marketing for Ranken, confirmed that the college is assisting in collecting resumes, screening applicants, performing testing and interviewing.
The employment activity follows a report in March from the Coal and Energy Price Report, a coal industry newsletter, that SunCoke wanted to buy about 950,000 tons a year of metallurgical coal beginning in the third quarter, to supply its new Gateway Energy & Coke Co. in Granite City, "which would sell coke produced from the coal to U.S. Steel Corp X.''
Coke, which is produced from metallurgical grade coal, is a key raw material used in steel production.
The partnership between SunCoke and U.S. Steel has been hailed as a way of enhancing the long-term viability of the steelmaker's Granite City Works, with energy generated in the coke-making process providing low-cost electricity to the plant.
Ground was broken on the project in May 2008, with U.S. Steel providing $280 million in the joint capital investment venture. The project includes the heat-recovery coke ovens constructed, owned and operated by Gateway Energy and Coke Co., a subsidiary and affiliate of SunCoke, and the energy cogeneration facility owned and operated by U.S. Steel.
David Stoecklin, executive director of the Madison County Government Employment and Training program, said Wednesday that he wasn't aware that SunCoke was advertising for operators and plant workers.
"It was my understanding from the engineering firm that the operation would not be functioning until sometime in the fall. Now, recruitment can start much earlier than that,'' Stoecklin said.