To the editor:
With all due respect, I did not find the May 25 article "RG workers brace for layoffs" helpful. While the article appears to adequately describe the current situation, i.e., "the patient has a fever of 104 and might not make it," it is woefully short on the causes of the problem, i.e., the source if the illness. The article lacks even rudimentary analysis of RG Steel's business problems. If a company has "liquidity" problems it usually is because there are not enough customers buying the stuff they make and paying the company on a timely basis.
There could be a multitude of reasons for that dilemma:
First, the customers that buy RG's stuff are having problems. Why? Who are the major customers? What is the percentage breakdown of the top 10 customers? What are the orders in the pipeline?
Second, if the product they sell is a commodity then price is typically the buyers' deciding factor. Is RG Steel's production cost too high, due to outdated equipment, costly raw materials or expensive unionized labor?
Third, can the competition make the product cheaper and provide better payment terms. Who is the competition? Why do they function differently?
Fourth, the company's service does not match the competition. Perhaps the competition is more responsive and delivers faster.
Fifth, the financiers are pulling the plug. OK, they normally do when they see dire business prospects and are no longer prepared to throw good money after bad. So what are the underlying reasons?
There is no such analysis in the article. Indeed the article outlines another impending travesty facing the Ohio Valley. A year ago ABC described the nation's new boomtown - I drove through downtown Steubenville the other day, and it looks worse than ever. If, in fact, RG Steel proceeds with the shut down, it is another erosion in our valley's confidence and ability to attract new industry, keep our graduates at home and build thriving communities. If we are made aware of the causes of the illness, perhaps we can work together and find a solution to keep the business going? I expected more analysis from the article.
P.S. - I live in Florida and come home on holidays like Memorial Day. I want to see our community thrive.
Peter Sontag
Steubenville
