Reporting from Kenosha, WI, the Associated Press details that Northern Steel Castings Inc. plans to cease operations in April. Company president Tom Nowak said Northern Steel would seek a buyer for its facility but will cease operations in April in any case.
The Kenosha foundry produces large steel components but finds it cannot remain competitive because of higher steel prices, as well as rising alloy prices. Nowak also indicated that foreign producers have an advantage over domestic foundries because of labor-cost disparities. "I think in the States the foundry industry has lost about 40% of its capacity in the last three to four years," Nowak said.
About 80 workers, who became unionized last year and reached a labor agreement earlier this year, will be left unemployed. A representative of the union told AP that it will negotiate a severance package for workers, but that keeping the plant operating appeared unlikely.
Nowak told AP that the decision to close the plant was made in January and the union agreement was not a factor "The union negotiations didn't have anything to do with it really, although of course it did add some extra costs in labor," he said.