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RG Steel Auction Draws Hundreds to Idled Mill
WARREN, Ohio – Matt Sawyer and his son, Doug, walked the floors of the former RG Steel plant here Tuesday and took a moment to marvel.
"I hate to see these old places go," the elder Sawyer said as he looked upward toward the high plant ceiling and then made his way through the tooling area of the sprawling complex by this time packed with hundreds of bidders. They were looking at buying some of the thousands of components slated for auction this week. "This building has got to be about 100 years old," Sawyer remarked.
Some 500 registered bidders attended the first of a four-day auction at RG Steel on Pine Avenue while between 150 and 200 bid online for equipment left idle when the mill closed its doors early last year.
Sawyer is the owner of Belmont Machinery Co., an equipment dealership just outside of Chicago. He and his son made the trip to Warren this week to purchase some of the items up for auction.
"We've already bought some of the equipment," Sawyer said, gesturing to a large horizontal boring mill manufactured in 1964. "We bought it for $20,000. It's a good buy."
Sawyer's company purchases these old machines, has them reconditioned, and then resells the equipment. "It's mostly repair shops, not for manufacturing," he noted. "Most manufacturers are looking for computer-controlled machines -- this one is manual. They don't make these anymore. They're just indestructible."
He said the last of these boring mills was manufactured during the late 1980s. "A new one then cost about $600,000," he said.
Many bidders were from out of town while others operate local shops. All were looking for smaller items.
“I think the prices are pretty high,” observed Phil LaRue, owner of Phil's Tool & Machine, a small machine shop in Howland. “I'm just interested in buying some tooling. I've purchased a small hoist, that's all.”
Others meantime were scouting the auction for valuable scrap metal.
One man who declined to be named paid $700 for a pile of scrap steel that he thinks will turn a quick profit. "I could probably get $2,000 for it," he offered.
A Canadian liquidation house, Maynards, is conducting the auction and working in conjunction with Myron Bowling Auctioneers, Ross, Ohio; PPL Auction, Northbrook Ill., Cincinnati Industrial Auctioneers, Cincinnati, BidItUp Auctions & Appraisals Worldwide, Studio City, Calif., and Council RB Capital LLC, a New York company that describes itself as specializing in “distressed and surplus capital assets transactions.”
The auction is slated to run until Friday and all of RG Steel's nonsteelmaking assets are for sale. Shuttle buses operated throughout the day, picking up bidders near the front gate on Pine Avenue and transporting them to a large building across a sprawling compound that once housed the company's tooling operation.
Auctioneers from Myron Bowling were busy conducing the tooling auction.
RG Steel shut its doors last year after it filed for Chapter 11 bankruptcy. BDM Warren Steel Holdings LLC, an entity formed by developer Charles J. Betters, purchased the mill in August for $17 million through the U.S. Bankruptcy Court in Delaware.
Betters has said that he's looking for a buyer to operate RG's hot-strip mill, winterized earlier this year to protect those assets in case a buyer emerged.
RG Steel's closing brought to an end 110 years of steelmaking at the site, which began 1902 as Republic Steel Corp. The company was then purchased by Jones & Laughlin Steel Corp., which subsequently became LTV Steel.
After LTV declared bankruptcy during the late 1980s, the company was reorganized as WCI Steel and owned by billionaire investor Ira Rennert as part of the Renco Group. However, WCI filed for bankruptcy in 2002, and the mill was sold in 2008 to Severstal SA, one of the largest steel and mining companies in Russia.
In 2010, Severstal sold the mill to RG Steel, an entity created by the former owner of the mill, Ira Rennert.
Copyright 2013 The Business Journal, Youngstown, Ohio.
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