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Sale of Cycle Systems leaves dozens jobless
A Brazilian steel giant did rehire a large number of the workers laid off from the Roanoke company.
REBECCA BARNETT | The Roanoke Times
Roanoke’s Cycle Systems Inc. terminated its work force of about 165 people before the Jan. 31 sale of company assets to Gerdau Long Steel North America.
STEPHANIE KLEIN-DAVIS | The Roanoke Times
The Ashley Plantation neighborhood, with $400,000-plus homes on a golf course in Botetourt County, contains signs like these along Greenfield Street, because a convicted sex offender’s wife is building a home in the community. The husband, Calvert Anthony Thompson, has a history of sexually assaulting young women but was released from prison in June and has reconciled with his wife of 20 years. ]
Wednesday, March 6, 2013
Dozens of workers lost jobs in Roanoke’s metal recycling industry when the assets of the city’s Cycle Systems Inc. were sold to a Brazilian steel giant.
The purchaser, Gerdau Long Steel North America — which has a U.S. office in Tampa, Fla. — laid out the details Tuesday.
In acquiring the longtime Roanoke family business, Gerdau bought Cycle Systems’ assets in a transaction on Jan. 31, Gerdau spokesman Phil Bell said.
The assets consisted of “plant, equipment and raw materials” though no employees, Bell said.
“Cycle Systems actually made a decision to basically lay off all employees prior to the acquisition. Once the acquisition closed, we hired back employees,” Bell said.
Bell estimated that Cycle Systems terminated 165 to 170 people. Gerdau then hired on a full-time or contract basis 105 to 110 of those people, Bell said. As a result, about 60 former Cycle Systems employees lost employment during the transition.
Gerdau didn’t need the entire former Cycle Systems work force because Gerdau already had management, selling and general administrative personnel before the consolidation, Bell said. Strategically, Gerdau wanted Cycle Systems as a metal source located relatively close to a mill it operates in Petersburg, Va., Bell said. It plans to continue to operate all nine former Cycle Systems locations.
Gerdau refers to itself as “the leading producer of long steel in the Americas and one of the largest suppliers of special long steel in the world.” More than 45,000 employees are spread over 14 countries. Production in 2012 came to 18.9 million metric tons of steel, the company said last month.
Because of the transaction, Gerdau provides financial stability that the former Cycle Systems business units needed, Bell said. “They’re no longer teetering,” he said, “but instead have a very bright future.”
Terry Brenner, a member of the Brenner family that owned Cycle Systems and an officer in the company, said he was unable to confirm the numbers Bell provided. Brenner did confirm that Cycle Systems terminated its work force .
“That was just a procedure — the way they handled it,” he said.
He referred further questions to Neal Brenner, who was president of Cycle Systems. Neal Brenner could not be reached for comment Tuesday.
Cycle Systems has not filed a notice of employee termination under the U.S. Worker Adjustment and Retraining Notification Act, which requires medium and large companies to notify workers and the public before substantial layoffs or plant closings, according to the Virginia Dislocated Worker Unit. Neither state officials — nor those at Gerdau — had information about why the filing did not occur. There is an exception for companies in financial distress.
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