Several hundred jobs at NS Group Inc. are in jeopardy because of the company's tentative decision to stop making steel coils at its Wilder plant and special bar quality products in Koppel, Pa.

        The Newport company said Friday it has started negotiations with the United Steelworkers of America about the impact of both decisions.

        It declined to say how many jobs would be affected, but the Steelworkers represent about 800 employees at both the Wilder and Koppel mills. However, about 120 workers are still laid off at the Wilder plant, which makes welded steel pipe (known as Oil Country Tubular Goods, or OCTG) for oil and gas drilling.

        “This is a difficult time for this company,” said Rene Robichaud, NS Group president and chief executive officer. Although prices for OCTG have rebounded over the last year as oil and gas drilling activity has picked up, Mr. Robichaud said, “we're in the midst of the second steel crisis in the last three years.”

        There's too much world capacity for steel, and that has sent prices plunging. John Tasdemir, analyst with Raymond James Associates, said flat-rolled steel is selling for about $200 a ton and estimated it costs NS Group about $100 to $125 a ton more than that to make its own steel.

        “We can basically buy steel coils cheaper than we can make them, which is what our competitors are doing,” Mr. Robichaud said.

        Benny Leger, president of USWA Local 1870 at the Wilder plant, said the union was notified of the company's decision Thursday night.

        “It kind of caught us by surprise,” he said. He didn't know what impact the company's move would have on jobs at the mill. The union's current contract with the company runs through April 2002.

        “I've told my members I'd share information with them as I get it, but I don't have any answers right now,” Mr. Leger said.

        Mr. Robichaud said NS Group has been buying steel and converting it to drilling pipe rather than melting its own steel in a $25 million electric furnace installed two years ago at the Wilder plant.

        Last year, NS Group reported a loss of $22.9 million on revenues of $355 million. The company, which was created in 1980 out of the former Interlaken Steel Co., is one of the few OCTG producers that makes its own steel. Most buy steel and convert it to pipe.

        Special Bar Quality, or SBQ products, which the Koppel mill produces in diameters up to 6 inches, is used in vehicle suspensions, gears, axles and heavy machinery. Mr. Tasdemir estimates NS Group lost about $9 million on the SBQ business alone last year.

        NS Group shares closed Friday at $11.21, up 56 cents.

'Steel crisis' at Wilder site
Fed keeps calm while consumers sweat
Fed's timing defended
1-year T-bill death won't hurt ARMs
Enquirer Portfolio Panel
Panel members share their top stock picks
HIGGINS: Personal Finance
Animal slaughter 'purely about trade'
Digineer cuts 19 of 131 jobs
E-toys: Fast plunge into bankruptcy
Japan's economy sinking rapidly
The Sophisticated Investor
UPS to buy shipper
Your tax questions
Your Taxes
Business Digest
Tristate Business Summary
What's the Buzz?