Temporary reprieve for workers: Pacific Steel Casting to remain open through March

A worker at Pacific Steel Casting readies to pour molten steel into a mold. Photo: Frances Dinkelspiel

A surge in new orders means that Pacific Steel Casting in West Berkeley won’t shut permanently on Dec. 17, as previously announced, but will instead be open at least through the end of March 2018.

Krishnan Venkatesan, PSC’s president, sent out a letter in English and Spanish to union workers on Dec. 8, telling them the news.

“I am happy to announce that with the continued support of our major customers PACCAR and NAV we will continue to operate Pacific Steel at least through the end of March,” he wrote. “I thank our entire team for your continued support in helping our customers with their orders.”

The company has even decided to hire additional workers, according to Donald Carter, a representative of Local 164B, Glass, Molders, Pottery, Plastics & Allied Workers International Union, which represents the workers.

The news is an about-face from the letter Venkatesan sent out on Oct. 17, alerting the state of California, the union and Berkeley that the 83-year-old plant would close permanently within 60 days. U.S. law requires plants that are closing to send out a Worker Adjustment and Retraining Notification Act, or WARN notice, to employees. If Pacific Steel anticipates shutting down in the future, it will have to send out a new WARN notice, said Carter.

Pacific Steel currently employs about 80 union workers, down from its all-time high of 670 workers. The company, like many foundries in the United States, has lost business to India and China, where wages are often lower.

Parts that have just been made cooling off at Pacific Steel Casting. Photo: Frances Dinkelspiel

Pacific Steel Casting makes custom parts for trucks, cars, buses, wheelchairs and other agricultural and industrial uses. It made parts that helped in the construction of the new Bay Bridge. PSC used to make parts for oil rigs and other operations but lost much of that business when oil prices dropped in 2015. One of its longtime customers is Peterbilt trucks, referred to in Venkatesan’s letter as PACCAR.

Speyside Equity, a private equity firm founded in Michigan, acquired Pacific Steel Casting in 2014 for $11.5 million after the Desol family filed for Chapter 11 bankruptcy to reorganize the company. PSC had about 400 workers at the time and had about $100 million in annual sales, according to court documents.

Speyside owns a number of foundries in the U.S. and Canada.

When Speyside bought PSC, it agreed to comply with the collective-bargaining agreements in place. But, earlier this year, representatives of the union’s pension fund sued Speyside under the federal ERISA law, stating that the firm had not been keeping up with pension and health payments. The board of trustees of the union’s pension fund has asked the court to allow it to attach a lien to the three plants at 1333 Second St., in the amount of $444,844.

An attorney for Speyside Equity told the judge, Elizabeth D. LaPorte, that if the pension fund board seized the company’s assets, it would force the complete shutdown of the plant.