When a group of Utah entrepreneurs purchased a failing Geneva Steel last Aug. 31, no one knew for sure if the buy out from USX Corp. would turn into a nightmare or a dream.
In retrospect, the first year's operation has become a dream come true for Geneva Steel officials who were in the right place at the right time.But for a small number of environmentalists and a few steel mill neighbors, the reopening of the plant by Basic Manufacturing and Technologies of Utah Inc. is still a nightmare because of pollution.
Geneva Steel President Joe Cannon said Geneva is within the Enviromental Protection Agency standards and does more than required by law to make the county "the best place we can to live in."
Cannon's experience with the EPA stems back to 1981 when he was employed by the agency. He eventually worked his way up the ladder to become head of the agency's air division.
For the most part, Cannon said his only negative experience in the past year at Geneva has come from the vehemence of Geneva's opponents who question his motives and say he is dishonest.
"We go out of our way to work with people and we are very honest," he said. "I have a lot of experience in the environmental area, and to have my motives questioned is disturbing to me.
"As near as we can tell it's a small number of people that are opposed to the plant. Their anger is way out of proportion as to what most people believe _ even people with no stake in the company."
When Cannon talks about Geneva Steel, it's obvious that his positive experiences at the plant far outnumber the negatives.
"When we started out, we planned to ship out 500,000 to 600,000 tons of steel in the first 12 months, and we have shipped more than a million in 10.5 months," he said. "That's double what we expected. That's been a good surprise."
Cannon, along with his brother Chris Cannon, headed Basic Manufacturing and Technologies, the company that now does business under the name Geneva Steel. Both were working as attorneys before they brought together BMT to purchase the steel plant. Chris Cannon now is president of Geneva's Development Division.
BMT purchased the weakening steel plant for $40 million, less than a third its estimated liquidation value, just minutes before it was scheduled to be closed forever by USX Corp. Now in its first year in operation, Geneva has had revenues of $450 million.
"We are in the black and have been since our second month. As an operating company we are earning enough to pay our workers, our bills and reinvest in the company," said Robert Grow, executive vice president of Geneva.
Geneva officials say the market will and has softened, but at least the company has had a chance to ensure that it has the long-term ability to produce steel.
"Most of our profits are going into rejuvenating the facility," Grow said. "This will give us the ability to produce steel for decades into the future."
Joe Cannon said the company's highest priority is the possible installation of a continuous caster in the mill. Molten metal from the furnace is now poured into a 350-ton capacity ladle and then poured into ingots. After the ingots cool, slabs are made and the steel is rolled. With the continuous caster, however, the molten metal goes through a process where it is cooled and comes out as a slab ready for rolling.
"That would modernize us and make us the low-cost steel producer in the country with the most up-to-date equipment," he said.
Grow said it would cost much more to install the continuous caster than it did to buy the mill, but it is "the most significant biggest improvement that can or ought to be made at this plant."
Pollution control is another major project at the plant, he said. Every year $40 million is spent to maintain and operate the plant's pollution control equipment. A new wastewater treatment plant will be installed in the next year for $5.5 million.
Another plus for the company comes from the boost it has given to the state's and Utah County's economy, Cannon said. Because Geneva is a locally owned company and 99 percent of the steel has been sold out of state, the money Geneva earns comes back into the state and boosts the economy.
Both Cannon and Grow agreed that a prime factor in the plant's success has been the work force.
Changes in management and a reduction in wages have caused disgruntlement among some employees, but for the most part employees have been pleased with the new ownership, said Doug Cluff, vice president of United Steelworkers Local No. 2701.
Cannon said the average hourly wage was reduced by 50 cents when BMT took over the plant, but Geneva workers are still in line with other independent mill employees. By the end of the year, Cannon said employees will get back their 50 cents and possibly more.
But Geneva's success doesn't make some of the plant's neighbors any happier. "It's just a mess," said John Morrissey, who lives nearby. "We have to clean it up (dust and carbon particles) every day, it is so bad. People that live down here get pretty sick of it."
Morrissey and several other residents have attended town meetings in the past months to tell government and air quality officials how the reopening of Geneva has affected their health.
Kimberly Warner, co-founder of Utah Valley Citizens for Clean Air, said thorough studies need to be done to make sure the plant complies with Environmental Protection Agency standards.