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USA - Omaha Steel plant gears up

You’ll forgive workers at Omaha Steel Castings if they exclaimed “Wahoo!” when a splash of molten steel flowed into a mold recently.

The occasion was the first cast metal product made at the company’s new $13.5 million plant on the northeastern edge of Wahoo, Neb., a milestone in the 107-year-old foundry’s relocation from its longtime Omaha home.

“To say it’s exciting would be an understatement,” said Phil Teggart, owner and president of Omaha Steel.

So far, 30 or 40 workers, depending on the day, populate the 130,000-square-foot plant as new equipment is installed and brought on line to make steel and stainless steel products and specialized metal alloys for such products as machine parts and oil valves, building frames and power plant doors.

The company’s 120 or so other employees still report to work at the old foundry, 35 miles away at 46th and Farnam Streets, a prime midtown site that is expected to face redevelopment someday.

Omaha Steel is ramping up the 20-acre Wahoo location and winding down the Omaha site with the goal of finishing the switch by Dec. 31. In the interim, a company bus shuttles back and forth in an effort to hold on to as many workers  and their talents  as possible.

“We haven’t really lost anybody yet,” Teggart said. “but when we make the move, we recognize there’s going to be folks that won’t want a 45-minute drive.” Some live in Council Bluffs and would face a commute of an hour or more. “We have to be realistic and understand that some of the folks are not going to move.”

Most of the staff in Wahoo so far are senior employees with skills needed to help set up the new facility.

“Our employees are extremely valuable to us,” Teggart said. “They’re going to be instrumental in training some of our new folks. There’s not a lot of foundry expertise in this area.”

A recent job fair yielded a list of about 120 qualified applicants, and a handful have been hired. Omaha Steel hopes to grow to about 250 people within six to nine months, thanks to a 30 percent to 40 percent improvement in efficiency at the new plant. Production could reach 500 tons a month, with sales in 2014 expected to exceed $30 million.

Teggart said some of the new workers will be from the Wahoo area, some from Omaha and some from Lincoln, which actually is closer than parts of Omaha. He plans to move from Papillion to the Wahoo area, too.

“For the entry-level positions, our biggest concern is finding a person who’s not afraid of work and is willing to learn,” he said. The company plans an extensive training program. “I wish there was a college of foundry that I could pull people from, but there isn’t.”

About 90 percent of the plant’s equipment is new, including state-of-the-art furnaces. As the company shuts down operations in Omaha, it will recycle some of its old equipment.

“If it’s steel, we can melt it,” Teggart said. “If the metal is clean, it’s a very good product for us to cut up and make into something.”

The 12-acre Omaha property is owned by the family of Ron Howlett, former owner of Omaha Steel, and is up for sale, as is, with a price tag of $8.1 million. It includes the adjacent TPR Self-Storage facility, also owned by the Howletts.

James Maenner, vice president of CB Richard Ellis/Mega real estate, who represents the owners, said he is in “pretty active discussion” with an out-of-down developer, and two others have toured the site, as well as one local developer. They have hotel and retail projects in mind.

The University of Nebraska Medical Center, located just across Saddle Creek Road from the old foundry, made an offer last spring based on an appraisal that was substantially below the asking price, said Donald Leuenberger, vice chancellor of the medical center. “We’re not within shouting range.”

The immediate need is for a hotel related to a new cancer center due to open in late 2016, he said. “We’ve begun to look at various sites around the campus and on the properties that we own,” if the Omaha Steel site isn’t available at the right price. “There’s a lot of thinking going on about what to do.”

The university has the power of eminent domain in some cases, Leuenberger said, but “that’s not something that we have really felt a need to consider at this point.”

Possibilities for the Omaha Steel site and other nearby land include expansion of the medical center campus, including a proposal to move Saddle Creek Road to the west and create a green space in the valley where the creek used to flow on the surface. The low spot is now covered by the four-lane street and storm sewers.

The Douglas County Assessor lists the value at $1.9 million for property tax purposes, but the land is a key link between the burgeoning medical center to the east and solid residential areas to the west, as well as connecting commercial zones to the north and south. Other nearby property also may be part of an overall redevelopment plan.

Maenner said there have been no environmental tests on the soil, but Omaha Steel is “comfortable with their environmental stewardship of the site.” The primary waste product from metal casting is sand from the molds. In the casting process, molds are fashioned from sand, clay and other materials because they don’t burn or distort when they come in contact with the molten metal.

The foundry processes don’t use oil or chemicals, and the furnaces are electric. But the plant also made amphibious landing craft during World War II, and other industrial uses in the area may have left surprise deposits there, Maenner said.

He said soil tests at a site just to the north turned up a small patch of coal, no doubt brought in for fuel in the distant past.

“The site will be redeveloped by someone at some point,” Maenner said. “The land is worthy of that.”

Source: Opens external link in new windowomaha.com

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