One evening during a Cubs game in 1988, A. Finkl & Sons Co. received a frantic phone call: The ballpark's lights were flickering. Could the steelmaker please turn off its furnaces to ward off a potential outage?
The anecdote illustrates one reason why Finkl is phasing out production at its century-old facility just west of the city's Lincoln Park neighborhood as it completes its move this year to 1355 E. 93rd St. on the South Side.
The new factory, equipped with the latest technology, improved production lines, better access to transportation and its own electric substation, will enable Finkl to boost its production fivefold to a half-million tons of steel a year.
"It's a huge step forward for Finkl," said John Guliana, the company's vice president of engineering and planning, explaining that workers will operate machines by pressing buttons on computer monitors. In contrast, the North Side plant, laid out over 22 acres separated by city streets, depended on manual labor, people working "with shovels and things like that," he said. Space was so tight that recycled metals and finished product sat out in the open.
So far, Finkl has spent more than $180 million on equipping buildings on the 53-acre South Side site that will house the melt, forge and machining shops, and offices as well as recycled metals and finished product. The new site is making steel and executives say it will handle 100 percent of production by the end of the year.
Finkl produces specialty steels made from recycled metals that are melted and forged into blocks. The blocks are sold to make molds, dies and large parts primarily used in the oil and gas industry.
At the old plant, those blocks sat out for up to two weeks before Finkl could load them onto rail cars, said Bruce Liimatainen, Finkl's chairman and chief executive. In that same amount of time, Finkl can now deliver steel to as far away as California, because the new plant's rail lines connect to the Norfolk Southern Railway yard just a few miles away.
"Literally, we can call them and within an hour they would be here," Liimatainen said. "It's the difference between competing overseas or not."
With its new capacity, Finkl is aiming to increase market share outside the U.S. and tap into the stainless steel market, sell bigger blocks of its specialty steels and offer roughly finished products.
Finkl's investments stand in contrast to what some other players are doing. Big steelmakers are battling declining prices and growing inventories of steel as China's economy cools and Europe continues to struggle with its own economic crisis. In December, ArcelorMittal, the world's biggest steelmaker by volume, took a $4.3 billion write-down of its European businesses. Europe's economic crisis, it said, led to lower demand for its steel, which is used to build bridges, car parts and pipes.
At the end of 2012, Finkl's sales were essentially flat from the year before, Liimatainen said.
Meanwhile, future development of the company's property on the North Side could lead to debate over the future of manufacturing there. Some residents want the site cleared for housing because it has river views. To do so, however, aldermen would have to end the area's designation as a "planned manufacturing district," which protected it from encroaching residential development a quarter-century ago.
"The site is a very important site to my ward and presents us with a historic opportunity, and we are looking at it very closely," said Ald. Michele Smith, 43rd. "Certainly, we would like jobs to come from there." Finkl's factory is in Smith's ward but will become part of the 2nd Ward in 2015.
Ald. Scott Waguespack, 32nd, said one idea is to try to attract green manufacturers, which might blend more easily with the neighborhood.
Some also have questioned Finkl's move from an upscale, predominantly white neighborhood to a predominantly black neighborhood dotted with boarded-up houses. Finkl has ringed the site with pine trees.
"What can we do now? Nothing," said Peggy Montes, president of the Bronzeville Children's Museum, located two blocks east of the new factory. She said the time to question Finkl's move has long passed. Going forward, Montes said, the conversation should be focused on how the company can help the community. "We don't have a YMCA; we are missing a lot of community-type services."
A 2008 Tribune investigation found that among Chicago factories, Finkl ranked worst for dangerous air pollution. At the time, its emissions of chromium, lead, manganese, nickel and zinc accounted for nearly a third of the city's total health risk from industrial pollution, according to the newspaper's analysis of U.S. Environmental Protection Agency data.
Liimatainen said equipment purchased for its new plant is the most energy-efficient on the market and therefore produces the lowest emissions. The investment, he said, makes the company more cost-competitive.
"The best way (to be environmentally conscious), is to use the lowest amount of energy," Liimatainen said.
For example, Finkl purchased a 70-ton electric arc furnace to make molten steel. The furnace's technology has reduced the time to make a batch of steel to about 40 minutes from roughly 4.5 hours.
Steel company forges ahead with new South Side plant
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Steel company forges ahead with new South Side plant
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Steel company forges ahead with new South Side plant
