LAPORTE | An iron foundry that has been a major employer in LaPorte since 1934 and made some of the largest metal castings in the United States is expected to close next month, putting more than 120 employees out of work.
Allegheny Technologies is winding down its unprofitable ATI Casting Service plant in LaPorte after an unsuccessful effort to sell the business. The foundry was originally supposed to be closed by the end of June, but had to fulfill outstanding orders and is now in the process of shutting down, said Dan Greenfield, vice president of investor relations and corporate communications.
"We're winding it down," he said.
The Pittsburgh-based company laid off about half the workforce last month, and expects the closure will be complete by the end of August, United Steelworkers Local 1191 president Donn Pendergrass said. Displaced workers are eligible for job retraining programs. Many have already found new positions at area employers such as Alcoa-Howmet, ArcelorMittal and the Michigan City Water Department.
ATI is still looking to sell the 550,000-square-foot plant and its business components, said Greater LaPorte Economic Development Corp. Executive Director Bert Cook.
LaPorte's overall industrial market is strong, which bodes well for a sale, Cook said. The vacancy rate is currently below 10 percent or 5 percent, depending on who you ask.
ATI Casting Service made high-quality ferrous castings of up to 200,000 pounds out of ductile and gray iron at the facility just off of E. Lincolnway. Workers poured and molded large castings for printing presses, wind turbines, automotive stamping dies, machine tool frames, industrial gas turbines and 16-cylinder diesel locomotive engine blocks.
A crew of seven workers poured the first iron casting at what was then Casting Service in 1934. Teledyne Industries bought the foundry at 300 Philadelphia St. in 1967, and merged with Allegheny Ludlum three decades later, creating a company that was rebranded as Allegheny Technologies Inc. in 1999.
At its height, ATI Casting Service employed more 560 workers and produced three large castings a day. The LaPorte facility forged massive metal castings taller than men for the gear boxes of wind turbines and the engines that power trains. When it was prospering, the company used to give away a pickup truck to a lucky employee every month, Pendergrass said.
"No one wins in a situation like this," he said. "The company had been decent to the workers. For a lot of them, it was their first job straight out of high school."
The castings industry has been struggling since the downturn. Three plants have closed so far this year, and a steel casting company filed for bankruptcy, according to Foundry Blog, which tracks the sector. ATI Casting Service saw demand plummet and was hit by several rounds of layoffs over the years.
Over the first six months of 2013, the LaPorte plant and an affiliated facility in Michigan brought in $10 million in revenue but posted a pre-tax loss of $9 million. ATI announced in October it had closed the fabricated components facility in Michigan and would try to sell the LaPorte foundry.
"These strategic actions are designed to position ATI for improved financial performance in 2014 and beyond, simplify capital allocation decisions and enhance our focus on ATI's strategic businesses," said ATI chairman, president and CEO Rich Harshman.
But the company could not find a buyer willing to pay as much as it wanted and decided earlier this year to just wind down the operations.
"In April 2014, we decided to close our LaPorte, Ind., iron castings facility, which was held for sale as part of discontinued operations," Harshman said. "After an extensive process, we concluded that we could not complete a sale transaction on commercially acceptable terms. We expect to record approximately $2 million in closure costs, primarily severance, in the second quarter 2014 as a result of this decision."
A total of 123 workers – moldmakers, electricians, crane operators, the president, everyone – will lose their jobs as a result of the permanent closure.
"Some are having a hard time adjusting, since it's the only place they've ever worked," Pendergrass said. "The sad part is that affects families and the whole community. The steelworkers are trying to make their transition as smooth as possible."