When Basic Manufacturing and Technologies of Utah Inc. bought the about-to-close USX Geneva Steel plant in 1987, some people thought the new firm might be acquiring a dead horse.
After all, Geneva Steel had been threatened with closure several times in its history, the steel market had been shaky for years, a labor dispute had closed the 44-year-old plant for more than six months, and USX clearly had given up on keeping Geneva running.But BMT - formed just to make the purchase - plunged ahead. Fortunately for Utah, the acquisition of Geneva Steel has turned out to be a stroke of luck, or good management, or some combination of the two. Things have gone better than anyone expected.
The company this week paid out $10 million in profit-sharing money to 2,200 workers. The average worked out to about a hefty $4,000 per employee.
That's a remarkable comeback. The number of employees is a surprise, too. When USX ceased operations during the labor dispute, Geneva had about 1,900 workers. When BMT bought the plant, it envisioned hiring some 1,300 people, but that has ballooned to more than 2,000.
The workers were asked to make wage concessions and raise productivity. They did both and, combined with a robust steel market, have turned a nice profit. The company's profit-sharing plan is part of the labor union pact and is designed to make the workers feel a part of a company team.
The profit sharing does not mean that only good times lie ahead. There are some indications the steel market is tightening up again. So Geneva workers need to be prudent in using their bonus money. As company officials said in handing out the checks, people need to plan ahead for tougher times.
In the meantime, Geneva Steel, the management, and the people who work there have brought a measure of prosperity to Utah County and the state with a well-run operation. Congratulations to all concerned.