Kevin Warnock

Entrepreneurship, ideas and more

Time to move Berkeley’s Pacific Steel to suitable industrial space

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Pacific Steel of Berkeley, California is apparently the 3rd largest steel foundry in the United States. Pacific Steel’s unionized employees are currently on strike and the company must be losing a fortune each day.

I have mixed feelings about this company. My company Silveroffice, Inc., the makers of gOffice, in 2005 used to be housed on 10th Street in Berkeley, about 8 blocks from Pacific Steel. Our tenancy at that location lasted just a couple of weeks because one of our employees got sick and started to miss work due, he claimed, to the noxious and poisonous fumes emitted daily by Pacific Steel.

Hadfields Works steel casting, 1925

Hadfields Works steel casting, 1925

The smell resembled a pot with a plastic handle left empty on a burning stove.

I smelled this smell as we were moving in, but didn’t think it was an ongoing condition. But after a few days, a neighbor dropped in to introduce herself and left us with a flyer advising the cause of the odor was Pacific Steel. I attended public meetings organized by the neighbors, and learned the plant emitted all sorts of carcinogens.

The plant moved into Berkeley in 1934. Apparently, back then, there were no homes, schools or offices anywhere near the plant. That was smart thinking, as I don’t see how a foundry can be odor free, given what they do inside, which is pour molten steel into molds to make truck and other parts. Even soldering an electrical connection on my desk makes a nasty smell, and I’m only melting a tiny amount of metal.

I think that Berkeley itself may be the party to blame here. They should have never allowed houses and nursery schools to be built walking distance to this huge factory, which fills more than a city block of land. Berkeley should have paid Pacific Steel to relocate if needed before they let a nursery school be opened across the street.

I suspect that Berkeley collects a LOT of tax revenue from Pacific Steel and ‘needs’ them to pay the bills. But I bet it can be shown people die earlier if they live for a long time near this plant. The current leadership of Berkeley didn’t cause the current mess, I’m sure, and from what I know, the leaders of Berkeley are kind and conscientious leaders. I’ve met Tom Bates, Berkeley’s mayor, and I’ve heard him speak. I was impressed with what I heard, but of course, he was not speaking about Pacific Steel.

Within days of discovering the health threat, I moved my company out of the vicinity of Pacific Steel. We moved back to our Berkeley Entrepreneurship Laboratory space for a few weeks to give me time to find new office space, which I did. We moved to downtown San Francisco into the Mills Building at 220 Montgomery Street in early 2006.

According to the article I link to here, Pacific Steel is losing money and thus it has asked its employees to pay for their health care insurance coverage. My guess is this coverage costs a fortune, because the air must really stink inside these ancient factory walls. The article says some of these employees have been working there for 30 years! The health consequences must be horrific, though I am just guessing, and perhaps there are air scrubbers inside that make the air as fresh as crisp ocean air. Has anyone reading this been on the factory floor while the plant is in operation? If so, please leave a comment telling us what the air smells like.

I think the solution is to simply shut the factory, take the modern equipment to a truly industrially zoned city area, perhaps far from Berkeley, and set up business operations there. Scrap the ancient equipment, perhaps by melting it down into truck parts as a final tribute to the company’s long and no doubt colorful history. Offer jobs to the best employees and don’t fight unemployment compensation for the rest of them. Yes, it’s sad some longtime employees will lose their jobs. But they are nearly certainly being slowly killed by working there, and given time, they will realize I predict that this wrenching change is in their best interests.

Remember, my office was about 8 blocks from the factory, and I found the smell unbearable once I learned it was carcinogenic. It was quite unpleasant before I found out the smell was carcinogenic.

In 2005, there was reportedly a nursery school right across the street from this old factory! Those poor children! Those poor teachers!

I have read Pacific Steel has spent millions on new equipment in recent years. They can take these goodies with them to the new factory. There probably is a closed factory out there that they can just buy for pennies on the dollar, like Tesla Motors just did with the Toyota/General Motors plant in Fremont, California. It must be so stressful for the Pacific Steel owners to be doing constant battle with its neighbors, so I would think they would welcome a chance to start over in an area that would welcome them, not shun them.

I’ve never written such a harsh post before, and I hope I don’t upset the workers or the executives too much by what I write here. I think Pacific Steel was harmed by Berkeley decades ago, and it’s probably too late to seek redress. So what needs to happen now is to make the best of a bad situation. Even if Pacific Steel has to reduce its size so it’s the 10th or 20th largest foundry in the US, it still makes sense to adopt my plan. Once they stop bleeding money on fines, lawyers and public relations, they can grow a number 10 or number 20 firm back to the number 3 firm, probably in only 10 years. Clearly the family has exceptional drive and tenacity to survive this long under such trying circumstances. When they can stop fighting and really work on their business, I predict great things will happen, and the health benefits to the whole community will allow that section of Berkeley to thrive.

I invite comments, even harsh and critical comments. I don’t know all the details, and I am open to writing follow up posts to correct or amplify points I make above. I’ll even meet with representatives of either side if they like to make certain I ultimately write a fair and balanced analysis. I’m a new journalist with no training, so please be patient with me as I tackle controversial, even explosive subjects.

PS – Moving away from Pacific Steel hurt my relationship with Priya Haji, who founded World of Good, Inc. gOffice was renting space from World Of Good on 10th Street, which is how gOffice came to locate near Pacific Steel. I had been quite close with Priya up until that point, and we would talk everyday, each advising the other on our repsective ventures. Once I left in a rush, we never talked like we used to, which makes me sad, as Priya is one of the most fascinating people I know. You could say our relationship was a casualty of Pacific Steel’s presence in the neighborhood, which should give you some background on why I felt compelled to sound off on my blog about such a controversial story.

 

Written by Kevin Warnock

March 21st, 2011 at 4:57 pm

Posted in Opinion

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