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February 28, 2017 Manufacturing Insights

Primetals stays strong through productivity

Photo/Laura Finaldi Gabriel Royo (left), and Michael Eldredge of Primetals Technologies.

While other steelmaking companies have left the Worcester area, Primetals Technologies, which grew out of the former Morgan Construction company, is still here. The company, a joint venture of Mitsubishi-Hitachi Metals Machinery and Siemens VAI Metals Technologies, stays strong in the Worcester market by boosting its productivity.

Michael Eldredge and Gabriel Royo, the two leaders of Primetals Technologies USA LLC in Worcester, spoke about workforce development and the changing steelmaking industry.

What do you do, and what are you each in charge of?

Michael Eldredge: Within the company, we have what we call segments, and they cover various aspects of the metals industry. In steelmaking, you have different ways to make steel. Converting iron into liquid steel is one approach, the other is taking scrap and melting it. In steelmaking, after making liquid steel you cast it, and then there’s rolling, and then there’s post-processing. So we have various segments that deal with those different parts of the business.

I’m responsible for long-rolling. Long rolling is one aspect of the metals business. If you think about say, rolled steel products, you have flat products -- steel plate and sheets and things like this -- that you make into car bodies or washing machines. Long rolling is typically rounds and squares and other shapes. What our customers produce is then used in further downstream processing. For example, a big use of the steel produced off of our machinery that we do in Worcester would be the steel-belted radial tires on your car. That steel wire starts off as wire rod off of one of our mills, as an example of a product in most people’s daily life. Coat hangers, nails, screws, wire fence, wire rope on a suspension bridge, these all start off as long rolled product and then have further processes done to them. I’m responsible for that business here in the U.S. and globally.

For long rolling, we have two primary locations: this one and one in Italy. And we have a specific portfolio focus, primarily on high speed wire rod equipment. That’s the legacy of this location, back from when it was Morgan Construction. Many people in Worcester would know Morgan. This part of the U.S. was the center of wire production at that time. That’s what we grew out of.

Morgan was bought in April 2008 by Siemens. Then, in January of 2015, there was a joint venture formed between Siemens and Mitsubishi Heavy Industries and so Mitsubishi-Hitachi is a 51-percent owner and Siemens is 49 percent. Our evolution here is from Morgan, to Siemens, to Primetals.

Gabriel Royo: Basically, as Mike says, you have these contract divisions. Contracts means when there’s a new installation for a significant organization, the contract division will go and do it. And across all of those divisions and supporting all of them is our service business. So the service business goes through steelmaking into all divisions and into processing plants. Here in the U.S. is the largest service business that we have. I’m responsible for servicing everything from the electrical furnace to casters, to rolling mills, flat rolling mills, cold rolling mills, processing lines, and long rolling mills, so all of that. So here, from Worcester, the technology that comes is long rolling and some flat rolling of products that are under the service business. I have responsibility in the U.S. for nine other service sites in the U.S.

Globally, I’m responsible for growing that service in locations such as China, India, Italy, and Austria -- they are all service teams. Basically what we try to do is see what service model works best in one country, and then we try to bring it to another country. We develop a new product. Service can be everything from supplying spare parts to doing small upgrades of technology, to complete maintenance contracts, where we maintain a rolling mill for a company. Or we do dollar per ton contracts where we take over the maintenance of a whole caster, for instance, which is a huge installation. Again, we supply spare parts and have huge maintenance contracts. We supply globally. In Worcester. we manufacture parts that we sell all over the world.

How many employees do you have here?

G: 350 employees in Worcester. Probably about 150 people are related to manufacturing activity.

M: We are recruiting for manufacturing and some engineering positions.

How do you make sure your workforce is well-trained?

G: It is a challenge in Massachusetts because the machine tools require a lot of training. Machinists, most kids now they want to go and work in computers. To attract them to this field sometimes is tough.

M: This area, the network of companies where people used to maybe move around through has gotten smaller and smaller over time. And so it’s difficult to hire experienced, capable machinists for our manufacturing. We do have different development programs, to try to bring people in and do training, including some grants from the state to do training programs.

G: We’re very active in the vocational high school as well. We have people in our manufacturing that are actively involved with that. And with MassMEP. In 1880, Worcester was the center of steelmaking in the U.S. but since then, all the steelmaking companies have left. The only thing that has remained here in the steel industry is us, so we must be doing something right.

Why have you stayed here though?

G: We have a tradition here, we have a good labor force, we have good engineering, and the quality of our equipment is very good. Of course, the cost is high in this area, but we try to compensate by being productive.

M: If you look at the history of the company from 1888, very early in its life, Morgan was doing business internationally. We have international contracts back into the early 1900s. And a lot of our business has been global, so the need to be proximate to specific producers, I can’t be near all of them. Here we’re next to good schools and have access to talent.

G: The reason we remained here, in retrospect, is when globalization came, rather than resist it, we embraced it. When I started with the company here, we were 1,000 people in Morgan times, in Worcester. We created Morgan in Brazil first, and then Morgan Europe, and the Morgan in China and in India. Fast forward 15 years later, we’re still 1,000, but 350 in Worcester. We were forced to become global. I think it was a good strategy.

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