Silence
In November 2001 Geneva Steel went quiet. Most of its roughly 1,200 workers were laid off, and in 2002 the company filed for bankruptcy for the second time in three years. By the end of 2003 about 25 full time employees were left, most of them busy selling off what the mill owned.
An offer from Qingdao
Then an offer arrived from across the Pacific. Qingdao Iron and Steel, a Chinese company, offered $35.3 million in cash for the heart of the mill: the furnace that made the steel, the machine that cast it into slabs, the mill that rolled it into plate and the line that finished it. Geneva had spent more than $400 million upgrading its equipment in the 1990s. The offer was less than a tenth of that.
Chief executive Ken Johnsen called it the first major offer Geneva had found acceptable. Chinese steelmakers liked used equipment, he explained, because it cost less and could be running sooner than new.
The bidding war
A second Chinese company, Nanjing Iron and Steel, jumped in. Qingdao raised its bid to $40 million. Nanjing offered $41.5 million, but had no letter of credit to prove it could pay, so Geneva and the court turned it down. Qingdao's offer was backed by the Bank of China.
On Wednesday, February 4, 2004, bankruptcy Judge Glen E. Clark approved the sale to Qingdao for $40 million.
Why did a Chinese city want a used Utah steel mill? Qingdao, a city of about 7 million, was China's biggest center for home appliances and electronics, and its appetite for sheet and plate steel was growing fast. China was expected to use about 300 million tons of steel that year, roughly three times what the United States used. A Qingdao official, George He, expected taking the mill apart, shipping it and rebuilding it to take 18 to 24 months and to cost more than the purchase price.
The end of an era.Michael Curtis, plant manager, 2005
Bittersweet
In Utah the news landed differently. Johnsen called it bittersweet. The price was fair, he said, but it meant Geneva Steel would never reopen. The machines were bound for Shandong Province.
That July, Qingdao hired a California firm, Tetra Tech, on a $27 million contract to take the mill apart, clean up, pack and ship it, and oversee rebuilding it in China, a job expected to take about two years. Among the equipment was the Q-BOP furnace, the modern kind Geneva had barged and trucked in from Chicago in 1991. Now it was going much farther.
Daybreak, 2005
Back in Vineyard, the rest of the mill came down. At daybreak in the summer of 2005, about 5,000 pounds of explosives packed into more than 300 drill holes dropped two smokestacks, nine stoves and three blast furnaces that had stood for 61 years. Former workers gathered around six in the morning to watch. Four of the 170 foot stoves stayed standing, their concrete harder than the rest. Plant manager Michael Curtis, at Geneva for 25 years, called it the end of an era. Jim McClure, who started as a laborer in 1973 and rose to general foreman, said it was hard to watch the core of the mill fall.
In November 2005 a developer, Anderson Geneva, bought 1,750 acres of the site for $46.8 million. The heart of Vineyard's steel mill was on the other side of the world. What it left behind was open ground beside the lake, and a question about what would come next.
