Pacific Steel Casting, which at its peak was a family-owned firm that employed 600 people, is closing permanently, its president announced today.
Krishnan Venkatesan sent a letter to the firm’s approximately 70 employees Tuesday morning.
“I write regretfully to inform you that Pacific Steel Casting plans to shut down its business located at 1333 Second Street,” Venkatesan wrote in the letter. “The plan is expected to occur on December 17, 2017. We expect these plans, when finalized, to be permanent and the Company’s entire operation in this location will be closed.”
City Councilwoman Linda Maio, who represents the district in which the huge casting plant sits, had not learned of the closure when Berkeleyside contacted her this morning. She immediately started to reach out to executives in the company, but they did not return phone calls.
“I have mixed emotions,” said Maio. “I don’t like high tech industries closing down because it means the work usually goes somewhere else.”
Berkeleyside reached out through the day to Pacific Steel, Speyside Equity, the private equity firm that acquired the company in 2014, and one of the unions, the Glass, Molders, Pottery, Plastics & Allied Workers International Union. No one returned phone calls.
Berkeley City Manager Dee Williams-Ridley obtained a copy of the letter Venkatesan sent, however.
“This is obviously of significant concern, and our office will reach out to the company to see what we can do,” Matthai Chakko, a spokesman for Berkeley, wrote in an email to city officials.
Pacific Steel Casting, based in West Berkeley, had been owned by the Genger family for four generations and has been in business since 1934. At one time, it was one of the largest independent steel casting companies in the U.S. and had 600 employees in three separate plants at an eight-acre site off Gilman Street. The foundries were among the last surviving manufacturers in West Berkeley, once the city’s manufacturing district.
The company filed for bankruptcy in 2014 and Speyside Equity purchased it for $11.5 million. A number of adverse factors contributed to the bankruptcy filing. Pacific Steel lost a third of its workforce in 2011 after a U.S. Immigration and Customs enforcement audit. Workers’ compensation insurance costs went up four-fold following a flood of claims from those departing workers. The company also settled a lawsuit about the timing of worker lunch breaks for around $5.4 million, which they paid out to about 1,300 current and former employees.
Pacific Steel makes carbon, low-alloy and stainless steel castings for U.S. and international customers, largely for heavy-duty trucks and construction equipment.
Residents have long been concerned about odors and other pollutants emanating from Pacific Steel Casting on Second Street, lodging hundreds of complaints with local and regional bodies. District officials have noted numerous violations over the decades.
The company was in the process of revising a permit for part of its aging facility. Of the three plants it operates in West Berkeley, one was not currently covered under the company’s Synthetic Minor Operating Permit or SMOP. The Bay Area Air Quality Management District notified Pacific Steel in 2005 that the company needed to apply for a permit that would cover all three plants.
Maio said she and West Berkeley groups have been working with the company to reduce its emissions, which have been noxious for many in the neighborhood. The emissions seemed to be on the decline, in part because they plant had reduced operations, she said.
Even though the environmental impacts of Pacific Steel Casting have been negative, the plant is an important manufacturer, she said. It makes critical components for many industries – “all of the things we rely on that we wish were not toxic,” said Maio.
In November, the company seemed to be on good financial footing as it announced two acquisitions.
Berkeleyside will update the story as more information becomes available.