For much of the last 84 years, when the sky was dark and most Berkeley residents were asleep, Pacific Steel Casting’s three plants on Second Street in West Berkeley were in full swing making parts for trucks, buses, ships and other industrial uses.
On the floor of Plant #2, employees working through the night tipped molten scrap metal into molds they had made of sand. In Plant #3, other workers cast parts for the huge rigs that pumped oil out of the ground. Flatbed trucks lugging giant baskets filled with castings rumbled down the pothole-ridden street. When the food truck pulled up, dozens of the company’s workers hurried outside to get a snack.
But on a recent Thursday, 1333 Second St. off of Gilman Street was eerily quiet. Instead of hundreds of workers, Pacific Steel Casting only had about 20 people coming in and out of the company’s various properties. And instead of making parts, those workers were mostly taking things apart. The foundry that started in 1934 — that had once been the third largest in the United States, that once generated $100 million in annual revenue, that had once employed 670 people, many of them first-generation immigrants — is finally shutting down.
“It’s empty. It’s weird seeing it like this,” said Mario Ponce, who has worked for 22 years at Berkeley Forge, a separate business nestled between two Pacific Steel Casting buildings. “I remember when I first starting working here, they had 500 people. It was pretty busy. You had to park four blocks away because the parking lot was full.”
The demise of Pacific Steel Casting signals the sunset of heavy industry in West Berkeley, an area once dotted with more than 100 factories.
Its closure has been in the making for at least ten years, although no single factor presaged its demise. Instead, a confluence of events conspired to weaken the company, including the 2008 economic downturn, an immigration audit in 2011 that led to the layoff of 200 highly skilled workers and a costly $5.4 million class-action labor lawsuit filed by employees. Those events prompted Pacific Steel Casting, long owned by the Genger and Delsol families, to file for bankruptcy in 2014. Speyside Equity, a private equity firm founded in the Midwest, bought the company for $11.3 million in July 2014 with promises to keep it going. Early optimism about the company’s prospects faded, however, as oil prices collapsed and China stepped up its casting production, making Pacific Steel Casting unable to withstand current economic vicissitudes.
In September 2017, Pacific Steel Casting declared that it would close within 60 days and that all its employees would lose their jobs. But an unexpected uptick in orders for truck parts allowed the company to limp along for another 10 months, according to Krishnan Venkatesan, the president of Pacific Steel Casting and an operating partner in Speyside Equity.
Now, those extra orders have dwindled and Pacific Steel is winding down operations. About 100 workers have been let go in successive lay-offs over the past few weeks, said Jerry Johnson, the vice-president of finance. A liquidation of assets has started, and United Asset Sales will be auctioning off the remainder of the company’s equipment on Sept. 11 and 12.
“We are out of business,” said Ron Benge, a pattern maker for Pacific Steel who was one of the few workers still on site on Aug. 15. “We are just liquidating now. [We] are still filling the last orders but we are no longer building anything. We are no longer pouring the metal.”
When the company closes and men and women are no longer pouring molten metal, shaping sand into molds, or moving enormous parts that made America hum, it will join dozens of other shuttered West Berkeley industries, including Colgate, Heinz, Durkee Foods, the Automatic Machine Tool Company, Manasse Tannery, Peerless Lighting and the Berkeley Brass Foundry. Good union jobs that paid workers from $18 to $25 an hour with health benefits will disappear, jobs that allowed immigrants with limited education and limited English to buy their own homes and send their kids to college. Its closure will come as a relief, as well, to neighbors who hated the burnt pot handle smell that permeated the West Berkeley air and prompted numerous protests, lawsuits, fines and health concerns.
“It’s an epic event. It’s the last of the smokestack industries in Berkeley.”
— Charles Wollenberg
“It’s an epic event,” said Charles Wollenberg, a historian who wrote Berkeley: A City in History. “It’s the last of the smokestack industries in Berkeley.”
While the doors will shut in late October after the cleanup is finished, the impact from Berkeley’s oldest manufacturing business will linger. Many questions remain. What will happen to the almost eight acres of land sitting next to Interstate 80 in an area zoned for manufacturing? Will the buildings and land need extensive environmental remediation? Can they be reused?
And, more urgently for the thousands of employees who worked at the company for decades, will they suffer financially now that the company is closing? Will their pensions and health benefits get paid?
When Speyside Equity, operating as the Speyside Fund LLC, bought the assets of Pacific Steel Casting, it spun them into a limited liability company and pledged to be bound to the collective bargaining agreement with the union representing the workers, according to court documents. It also pledged to assume about $24 million in pension liabilities as well as to continue to pay health benefits — as long as the new company stayed in business for five years. That was a requirement of a federal law to protect employees known as ERISA, or the Employee Retirement Income Security Act of 1974.
But the new entity, Pacific Steel Casting LLC, stopped paying health benefits in January 2017, even though it continued to take deductions from employees’ paychecks. When the company was sued, it declared that it did not have sufficient financial resources to make the payments. The partners of Speyside Equity, which raised $130 million in 2016, are arguing in federal court that they are a separate legal entity and don’t have an obligation to pay the health costs. They claim that the Speyside Fund is a minority investor in Pacific Steel Casting and the partners in Speyside Equity have no direct connection with Pacific Steel Casting LLC at all.
“Legally and financially [Pacific Steel Casting LLC] is not related to any of the Speyside entities,” Venkatesan told Berkeleyside.
The attorneys for the trustees of the union’s health and welfare trust “contend that Speyside Fund LLC and Speyside Equity are alter egos of Pacific Steel Casting Company LLC,” according to court documents.
It will take months for the courts to determine the true owners and which entities are ultimately liable for the health benefits owed to the thousands of people who worked at Pacific Steel Casting. It could take years before the courts decide who will pay the $24 million in pension benefits owed to those workers.
A diverse, highly skilled workforce
Around 7 a.m. on a chilly December morning, Tony Silva sat on top of a huge machine that poured molten metal into molds. He deftly moved the machine’s controls to tip a bucket, sending a steady stream of red-hot metal into a casting that Silva’s colleagues had made nearby.
When Silva first came to work at Pacific Steel Casting about 42 years earlier, he didn’t speak English and didn’t have a high school education. Silva’s family had emigrated from the Azores seven years previously and the 18-year old had heard about a job opening from his brother-in-law.
Silva was strong and willing to work hard. He was hired and he rose through the company until he became a “melter,” one of the most respected positions in the plant. A melter is a combination alchemist and cook; he has to mix together batches of scrap steel in particular combinations before he melts the material and pours it into a mold. The melter has to pay close attention to the melt chemistry and make sure not too much air gets into the mixture, or it can bubble up like foam rising over the top of a glass of beer. He has to control the furnace to bring the metal temperature high enough to melt, but not too high.
“Melting is the most difficult thing you can do in a foundry,” Venkatesan said in December when Berkeleyside took a tour of the company. “We live by the quality of the metal. It’s a highly skilled job and it’s a difficult job.”
Silva doesn’t think Pacific Steel Casting would employ him if he walked through the door today. Nor would many other places. Nowadays, employers want people with computer skills, he said. But Pacific Steel Casting did hire him, and as a result, Silva has had a good life. He married, moved from Oakland to Dublin, and raised two children, one of whom works in the insurance industry and one who installs hardwood floors. (When his son used to goof off at school, Silva would bring him to work and tell him if his grades didn’t improve he would one day, too, have a physically challenging job.)
Silva’s long tenure at the company is not unique. Many employees worked at the Pacific Steel Casting for decades, often beside their brothers, cousins, sons, nephews, and occasionally, sisters or sisters-in-law. Pacific Steel Casting, family-owned for most of its existence, was the type of company that hired entire families, generations of families, in fact, giving it a friendly feel. The company even ran English language classes for its employees. While the workers in the early years were predominantly white, at one point, Pacific Steel Casting had employees from 30 different countries.
Jorge Costa worked at Pacific Steel Casting for 39 years, starting at the bottom in 1979. He rose to be the plant’s general manager, one of the company’s top positions. At one time there were eight Costas working at different jobs: four brothers and four nephews, he said. Pacific Steel Casting was like that: brother told brothers and brothers-in-law about jobs, and then their children came to work.
“All of my brothers worked here at one time or another,” said Costa, 62, whose family came from Portugal in 1970. “This company has a history of having family employees.”
The work at Pacific Steel Casting was highly skilled. At its peak, there were three plants in operation running 24 hours a day. (Electricity bills were enormous and PG&E gave a price break for electricity used at night, said Ventakasen.) Each plant produced different size castings and used different methods to make them. Plant #1 used “the green sand mold process” (comprising sand, bentonite clay, water, and cornstarch) to produce castings that weighed from one to 1,500 pounds, according to documents from the Bay Area Air Quality Management District (BAAQMD). Plant #2 made smaller pieces that weighed as little as an ounce and as much as 60 pounds. The sand was mixed with a binder and was baked to form molds and cores. Plant #3 was designed to make huge castings as heavy as 7,000 pounds. The process used a phenolic urethane binder mixed with the sand, according to BAAQMD.
All the three plants used a similar process to make the molds. Workers would mix sand with a binding material to form a shape, although there were also specialty pattern makers who made molds out of wood. Workers would melt scrap metal of different combinations in an electric arc furnace and then pour the molten metal into transfer ladles. Workers would tip the metal into the mold, let it cool, and then break away the sand cast. The parts would then be finished off by grinding away the excess metal to smooth it.
The company became internationally respected for its castings.
“People may not know that the company is known worldwide for the quality of the castings it produces,” said Venkatesan. “It’s a well-known gold star foundry that’s closing.”
Pacific Steel Casting also had a culture that honored the employees’ hard work and the quality of their craftsmanship. Abel Rodriguez, 57, is one of the workers the plant has celebrated. He holds the plant record for making the most molds in one day. In 1998, 13 years after he started working at the foundry, Rodriguez made 608 molds during an eight-hour shift, shattering the company’s record. Just to show how impressive that is, on another busy day, four people working a full shift only made 561 molds.
Rodriguez, who served as a supervisor for 24 out of the 32 years he worked for PSC, became a mini-celebrity. He got his photo taken and a sign about his achievement was affixed inside Plant #2. Years later Rodriguez shrugs at the record because it was all part of a day’s work in a business that let him buy a home and raise his family.
“I love this job,” he said. “I try to do my best every day.”
“There were so many success stories that came out of the hard work and mutual respect between management and the workforce,” said Elisabeth Jewel, whose firm, Aroner, Jewel & Ellis Partners, did public relations for the company from 2006 to 2014, when it was owned by the Genger family “Not all of it was perfect, but there were good benefits and pension. Turnover was low.”
Founded during the Depression, the plant flourished until 2008
When Berkeley was founded in 1878, there were two populated areas: the university, high in the hills on the east side, and Oceanview, an area dotted with farms and industry adjacent to San Francisco Bay. The 1906 San Francisco earthquake and fire ushered in a population explosion and industrial boom as people fled the city to find housing and jobs. Thirty-seven new factories were built in Oceanview, which was also becoming known as West Berkeley, in just a few years, according to a history compiled by WEBAIC, the West Berkeley Artisans & Industrial Companies, which acts as an organized voice for the industrial community. Heavy industry was concentrated west of Fourth Street, while homes, mixed with factories, spread from Fourth to Sixth Streets.
In 1934, in the depth of the Depression, three men purchased a foundry in West Berkeley on Second Street that had gone bankrupt. They named it Pacific Steel Casting. They hired five workers to make castings for auto parts and trailers, according to a 1936 article by the Oakland Tribune. The owners could not afford to pay themselves.
Within two years, Douglas “J.D.” Genger, who was raised in Pennsylvania in the heart of the Eastern steel belt, Ivan Johnson, who had spent 22 years with the Best Steel Casting Company in Oakland, and E.S. Shank, who worked at the American Steel Foundry on the East Coast, had transformed the fledgling business into one of the largest foundries in the country, according to the newspaper article, which still hangs in the main office of the company. The growth of the “modern temple of Vulcan,” as the newspaper referred to the company, was aided by the brand new highway linking the East Bay to San Francisco.
Pacific Steel Casting would go to even bigger growth during World War II when it became a major supplier of parts for military ships. The company was part of a boom that brought the number of factories in West Berkeley to 187 in 1947, according to WEBAIC. When peace arrived, the company switched to making custom parts out of steel and other scrap metals for trucks, cars, buses, wheelchairs and other agricultural and industrial uses. Over the next eight decades or so, the company would cast 15,000 custom molds, with parts weighing from an ounce to thousands of pounds. Pacific Steel Casting made manhole covers, parts for AC Transit buses, wheelchair lifts, pipes, valves for sanitary sewers, public water systems, landfill compactors, parts for oil rigs and mining operations, and custom parts for the new eastern span of the Bay Bridge.
At some point, Johnson left the company to head up the Bay Area Air Quality Management District, formed in 1955, and the Genger family took full control. Details about much of the company’s history are murky, and repeated emails and calls by Berkeleyside to Douglas Genger’s descendants to get more information went unanswered. Douglas Genger’s two sons, Richard and Robert, ran the company’s operations until the late 1980s. Robert died in 1992 and Richard died in 1994.
Robert Delsol, who had married Richard’s daughter, Elizabeth, started to work at Pacific Steel Casting in 1973 and rose to become the company’s president. He died unexpectedly in 2008, however, and his daughter, Catherine “Katie” Delsol, just in her 30s, took over as president. She had little experience in running a foundry and relied on professional managers and a professional board of directors to oversee operations, according to Jewel.
“While it was personally important for her to carry on the family business, she was a semi-reluctant heir,” said Jewel. “It was not her intention to have a career running the company. It was handed to her. But she rose to the occasion in many ways.”
Robert’s death at the start of the 2008 economic downturn was the first in a series of blows that severely undermined the company. In 2011, the Department of Homeland Security did an audit and made the company prove that its 600 or so employees were working legally in the U.S. More than 200 highly skilled longtime employees did not have proper I-9 forms and were laid off, severely impacting the plant’s operations. “One day a third of the workforce with hundreds of years of experience walked out the door,” Jewel said. “That’s hard to recover from.” The company had to pay $401,000 in fines for violating employment regulations.
Workers’ compensation insurance costs went up four-fold following a flood of claims from those departing workers. Then, in December 2011, Timothy P. Rumberger, a Berkeley attorney, filed a $31 million class-action lawsuit in Alameda County Superior Court on behalf of Roberto Rodriguez, a former employee who had worked at PSC for 45 years, and 1,300 other current and former employees. The suit accused management of violating labor laws by not giving workers a break after six hours of work. The union, Local 164B of the Glass, Molders, and Pottery Union, was not part of the lawsuit.
Pacific Steel Casting settled the suit in January 2014, agreeing to pay out $5.4 million. But the company did not have that much cash on hand and a few months later it filed for bankruptcy. It cited its inability to find replacements for the 200 workers it had to fire as a contributing factor to slow sales, according to court documents. Jewel said that the company had also incurred millions of dollars in legal fees.
Enter Speyside Equity, an investment fund run by a pair of men who met in business school in Michigan. When the fund purchased Pacific Steel Casting, it seemed like a perfect fit. Speyside, started in 2005, specialized in “investing in the manufacturing, chemicals, metal forming, building materials, industrials, and food and ingredients sectors,” according to Bloomberg News. Speyside said it intended to keep Pacific Steel Casting, then generating about $100 million in revenue, open. It installed Venkatesan, who holds both a Ph.D. in engineering and an MBA, as president. He had previously worked as a plant manager at Stahl Specialty in Ohio, a foundry that made aluminum castings.
“They were very clear that this was not something they were going to flip, but that they were going to stay,” said Jewel, who did a bit of work for Speyside.
But a short time later, the oil and gas markets tanked, reducing the company’s revenues by 80%, according to a knowledgeable source who asked not to be named. That sector had been one of PSC’s biggest customers. Businesses turned to China, with its 10,000 steel plants and lower paid workforce, for parts. By mid-2017, there were only about 70 workers left, down from the 400 who had been there when Speyside Equity took over. By mid -2017, the company appeared to be winding down operations, despite the fact that Speyside Equity had a $130 million institutional fund and had purchased seven foundries or metal fabricating companies that year.
Pacific Steel Casting laid off workers, outsourced operations to another plant it owned and sold accumulated metals to a scrap dealer, according to a lawsuit filed by the organization representing the workers’ health benefits. In addition, the company failed for six months to make around $421,133 in health and pension payments to its workers, according to court documents.
Then in September, Pacific Steel Casting announced it would close permanently.
Decades of complaints about a ‘burnt pot handle’ smell
Janice Schroeder is one of many Berkeley residents who will be relieved not to be breathing noxious fumes from Pacific Steel Casting, although she is sympathetic to those who lost good-paying union jobs and would have preferred the company fix its problems rather than close.
Schroeder, who lives about a mile from the plant, has been fighting the company for almost 40 years. As one of the core organizers of the West Berkeley Alliance for Clean Air and Safe Jobs, a grass-roots environmental group with origins stretching back to 1975, Schroeder has long been concerned about the health impacts of the emissions spewed from the company’s three plants. During the past few decades, she and other residents have complained, picketed, organized community meetings, pushed for monitoring stations around the neighborhood, put the complaint line to the Bay Area Air Quality Management District (BAAQMD) on speed dial, accompanied investigators around to locate the source of foul smells, filed lawsuits in court, argued with their representatives, City Councilwoman Linda Maio, former Mayor Tom Bates and the Zoning Adjustments Board, and more, all in an attempt to both get rid of the odorless toxic emissions and the noxious burnt pot handle smell that can pervade the neighborhood.
Schroeder moved into her home in 1979. Her stretch of Curtis Street is lined with trees and the mostly one-story houses give the block a small-town feel. There is little hint that factories and a busy highway are a short distance away.
Within three months of moving in, Schroeder knew that something nearby was causing her to feel ill.
“The smell was incredibly strong and caused my breathing to be more labored,” she said. “I’d get headaches and nausea.”
The noxious odor is a common complaint in the neighborhood.
“Community members’ quality of life has suffered as a result of the polluted air,” reads the website of the West Berkeley Alliance. “The ability of community members to enjoy living in their homes, relaxing in their yards, and visiting nearby parks with their families has been affected. The odors and toxic emissions emanating from PSC can cause residents to stay inside their homes and apartments with doors and windows closed, even during hot weather.”
While Pacific Steel Casting had been operating since 1934, in 1975 it built Plant #2 and started to use a synthetic resin in processing. The complaints about the burnt pot handle smell accelerated after that. Plant #3 came online in 1981.
Much of the odor comes when the sand molds are broken open, and gases from the various binders are released into the atmosphere, according to Jewel. Operating the equipment produces other pollutants.
“The facility emits tens of tons of harmful air pollutants each year, including sulphur oxide, nitrogen oxide, carbon monoxide, and particulate matter, commonly known as soot,” wrote Schroeder in a 2017 opinion piece in Berkeleyside. “The facility further emits significant quantities of hazardous air pollutants like lead and manganese, and the associated cancer risk of 31 in a million has made PSC subject to annual public notification requirements under the state’s Air Toxics Hot Spots program.”
In 1979, Schroeder tried to report what she was feeling to the fire department. She didn’t yet know that the BAAQMD regulated Pacific Steel Casting. Trying to track down the source of the odors and get the health hazards ameliorated thrust her into her decades of activism.
The history of trying to get Pacific Steel Casting to admit its emissions were noxious and harmful and to get BAAQMD to be proactive about the issue spans decades. (See a chronology put together by environmentalists.) The battle pitted neighbors against one of Berkeley’s most important companies and would often be characterized as a fight between good jobs and the environment. Complicating the issue was the fact that there were other West Berkeley companies that also dumped pollutants and particulates into the atmosphere, including Berkeley Asphalt and Berkeley Forge. Tens of thousands of cars traversing nearby Interstate 80 each day also spewed soot that settled on residents’ windowsills.
In 1985, after BAAQMD sued Pacific Steel Casting, the company spent millions of dollars to install a carbon filtration system on Plant #2. In 1991, it installed a system on Plant #1. The carbon filtration system was not put on Plant #3 until 2006. PSC also agreed to some other measures to capture the odor from the plants, such as installing bag houses, which captured dust, according to BAAQMD documents. In 2007, the company changed the binder it used in production to reduce the release of volatile organic compounds that created the burnt pot handle odors, among other steps.
For some residents, like Schroeder, those pollution controls, however, did not resolve the odor problem nor reduce the release of other potentially harmful gases. Residents pushed to get the company to set up monitors that could provide real-time information out about air quality.
Over the years, Pacific Steel Casting officials repeatedly denied that its plants were dangerous. They often pointed out that the company had spent millions of dollars on pollution controls.
Proof that the company was not emitting harmful emissions was the fact that its workers did not get sick, Joe Emmerichs, who worked at Pacific Steel Casting for more than 45 years and who became president, told a community meeting in January 2008.
“We don’t have any problems with anyone getting sick,” said Emmerichs. (See video.) “We have not had any employees getting sick, ever. This is proof right here.” (He died from complications of Alzheimer’s on July 20.)
Emmerichs went on to say that “we have one of the cleanest foundries in the country, in the world.”
In the meantime, residents also grew increasingly frustrated by what they perceived as foot-dragging on the part of officials. Christopher Kroll, who moved into West Berkeley in 2000, said he felt abandoned by his local representatives and the air district. Both he and Schroeder were appalled, for example, that the Zoning Adjustments Board approved new use permits for Plants #2 and #3 without requiring environmental impact reports. They wish that ZAB had used those use permits as a hammer over the years to get the company to reduce the toxicity of its emissions. The pair is also outraged that the air district only investigated odors during business hours, even though Pacific Steel ran operations 24/7 for eight decades.
“From the community’s perspective, BAAQMD’s odor-complaint system is broken,” one group wrote to BAAQMD recently. “It’s rare for an inspector to respond to odor complaints before or after regular business hours, or on weekends and holidays. In our experience, after hour complaints are met by an answering service; an inspector almost never comes out to investigate. Or an inspector will come out the next business day but the odor will have long since dissipated. Complainants give up in frustration and anger.”
Frustration has only grown since 2005 when BAAQMD informed Pacific Steel Casting that it had to apply for an additional permit known as a Synthetic Minor Operating Permit, or SMOP, to cover Plant #1. The permit was intended to limit the amount of emissions the plant could send into the air and to ensure compliance with state and federal laws. Local residents hoped the process would allow them to present their concerns to air district officials and get some changes made. They were also hoping that the BAAQMD would use the permit as a way to be more proactive about the odors coming from Pacific Steel Casting rather than relying on neighborhood complaints to prompt an investigation.
But the permitting process dragged on for 13 years. BAAQMD only issued the SMOP on June 25.
“Isn’t that shameful that the air district let that go from 2005 to 2018?” said Schroeder.
The air district said there were many reasons for the delay, including the change of ownership in 2014. The agency spent years “gathering data, reviewing emissions estimation bases, and negotiating with the facility to find permit conditions that would be both practically enforceable as well as acceptable to the facility,” according to a response filled to a public comment. “During negotiations, the facility went bankrupt and the District had to discuss the proposed SMOP with the new management.”
For Schroeder and Kroll, that length of time was unacceptable and reflects the indifference they feel officials have for the community.
Maio, who has represented the district for 26 years, got so many complaints and questions about the company that she set up a city webpage to collect information in one place. She assesses the situation differently than Schroeder and Kroll do, however. Change has come, albeit slowly, she said. Community pressure, as well as actions from Berkeley and the air district, forced PSC to take a number of steps to clean up its emissions over the years, she said. The air is much cleaner and complaints are fewer, she said, although part of that may be attributed to a drop in production. In the last five years, there has only been a handful of odor complaints compared to dozens and dozens in years past, said Maio.
While the air district had been cozy with industry for decades (its first president in 1955 was Ivan Johnson, who co-founded Pacific Steel Casting in 1934), it got more serious about regulating foundries and other factories after Jack Broadbent became the CEO, she said. Former Mayor Tom Bates also joined the board in 2006 as one of the 22 elected officials and pushed for a harder line, she said. BAAQMD took a number of steps after that to better measure emissions, including setting up an air monitoring trailer in the parking lot of Picante restaurant, not far from Pacific Steel, in late 2007. It monitored air quality for a year an a half. The findings did not show that the air quality “came in over the established threshold of concern,” she said.
“The city keeps getting whipped by this small community group that we’re not doing enough, we’re not doing enough,” said Maio. “No amount of science on the emissions side is ever trustworthy, is never enough.”
The air district contends that emissions have improved in the last 10 years, although they acknowledged that the SMOP permitting process revealed that the plant is emitting more carbon dioxide than previously known. The human nose is more sensitive than instrument readings, so even though people can detect the burnt pot handle smell, that does not mean dangerous odors are being emitted, the air district wrote in response to the SMOP application.
Good-paying jobs pitted against environmental concerns
While Maio and other city officials were hearing about odor issues from one side, others were concerned that too much regulation would impact union jobs and the diversity of Berkeley’s workforce. A significant number of West Berkeley residents developed a “KIIMBY” attitude about the factory, said Rick Auerbach, a member of WEBAIC. The phrase, first coined by people at the Ecology Center, means “keep it in my backyard” but clean it up, too, he said.
Margo Schueler, a neighbor who served on the public works commission as Maio’s appointee and who has been monitoring Pacific Steel Casting closely, said nearby residents have had mixed feelings about pushing to close the plant. They recognize the value of the union jobs and the quality of the work, and know if the plant shuts, importing the parts it once made will create even more pollution since they will be shipped from overseas.
“The neighborhood is split,” said Schueler, who is running for the City Council District 1 seat. “There are many people who don’t want to lose this asset. But nobody wants to kill their kids.”
When the City Council was considering in February 2008 whether to declare Pacific Steel Casting a public nuisance in order to better regulate its impact on the community, dozens of union employees crowded the chambers. They spoke about the importance of their jobs and how Pacific Steel had afforded them advancement.
The tension between the competing interests meant that no one left satisfied.
“Federal and local officials didn’t care that much,” said Ignacio De La Fuente, a former Oakland City Councilman who served for 31 years as the head of the Local 164B union. “It became more difficult for manufacturing to survive. It became more difficult for manufacturing to function. You need to balance good union jobs that enable people to raise families with the environment.”
Financial uncertainty ahead for the thousands of retired workers
In an ironic twist, the only way former Pacific Steel Casting workers might be sure they get their pensions is if the old plant closes and the land is sold.
Speyside Equity claimed in one federal court case that it is not the true owner of Pacific Steel Casting and thus was not liable to pay into the health and welfare trust set up by the union. The equity firm might make the same claim about the pensions owed to the workers.
If that argument succeeds, the $24 million pension debt will revert to the old company, which is now a limited liability company known as Second Street Partners. It is made up of all the creditors of the old Pacific Steel Casting. That includes the workers who filed the class action lawsuit and won the $5.4 million settlement, which they have yet to collect; a number of companies owed funds, and some of the board members of the old company, including Genger descendants.
The trustees for the pension fund cut a separate deal with the bankruptcy trustee, according to court documents. They secured a deed of trust against the eight acres in West Berkeley as collateral. So in order to get the funds to pay the pension debt, the land would have to be sold.
The administrator for the bankruptcy plan of reorganization, Arch and Beam, has hired a broker, Cushman and Wakefield, to sell the various buildings and land. Prospective tenants have been coming through, according to Venkatesan.
But when PSC filed for bankruptcy in 2014, an assessment determined that the property was only worth $13 million. Berkeley has experienced a huge rise in housing and land prices since then, but no one contacted by Berkeleyside knows how much the various properties are currently worth.
And it is unclear who might reuse buildings that were once used for heavy industry. In recent years, as traditional factories have closed, West Berkeley has seen an increase in light industry, such as food manufacturers like Morell’s Bread or manufacturers like ZenBooth, which makes indoor phone booths that offer privacy in open-plan office spaces.
Companies looking to grow cannabis have had difficulty in recent years in finding space in the M (manufacturing) zone and the size of the Pacific Steel Casting buildings might appeal to that market category.
The area could also be used for auto dealerships, said Auerbach, who sat on the committee that created the West Berkeley Plan, which the city adopted in 1993.
Auerbach is optimistic that the land and buildings can be turned into something interesting. As an example, he pointed to the nearby Flint Ink building, which the developer Eddie Orton converted. At times, the building has held a number of wineries and a solar energy company. The old Pyramid Alehouse on Gilman is also set to be transformed into a campus of startups and food producers. Tesla Motors is also scheduled to open a service center there.
“There’s enormous demand and pent-up demand for space for manufacturing, for warehousing, for recycling, for arts and crafts and all the contracting, all these things could be used there,” said Auerbach. “The central location, access to freeway, bridges, port and airport, and the Berkeley address are just some of the factors that have contributed to Berkeley consistently having the lowest or next to lowest East Bay industrial vacancy rate in the 14 years I’ve been checking.”
A recent report by Cushman and Wakefield showed there was a 3.1% overall industrial vacancy rate in the East Bay in the second quarter of 2018. However, in Berkeley, that rate was 0.4%.
In the meantime, Pacific Steel Casting is winding down. It has already held two auctions, with another two coming up in September. Reading the list of equipment to be sold shows just how long Pacific Steel Casting has been in operation. There are more than 1,000 items, ranging from a Whiting arc furnace with a 2000 KVA transformer, to shell molding machines to a “complete inspection department.”
Dismantling a company that has been in the same place for 84 years is not easy. A few weeks ago, the pattern maker Ron Benge, who made thousands of casting molds out of wood for the company, showed a reporter around a room in the now-shuttered Plant #1. Large wooden molds were laid out on the floor, many of them made by Benge over the years. He was getting them ready to be shipped back to the customers who ordered them.
Benge, 64, is one of the “lucky” workers. He had already given a two-year notice of his retirement to the company because men with his pattern-making skills are fading away. The work is moving to computers, he said. So news of the closure left him feeling sad, but he had already planned his future path. Not all of his co-workers felt the same.
“A lot of them aren’t dealing with it very well,” said Benge.
De La Fuente said that in recent years, some of the skilled workers laid off from Pacific Steel Casting have found other decent-paying jobs. Many don’t, though, as more and more of this kind of work moves overseas.
“A lot of families are going to be devastated because they don’t have jobs,” he said.
Venkatesan, the plant’s president, is wrapped up in selling Pacific Steel Casting’s assets, overseeing the disposal of its chemicals and metals, instituting a clean-up plan and saying goodbye to a workforce that contributed to the company’s storied history. As the end nears, he is melancholy.
“I’m proud to be part of the history of a great company and I am sad to see it close,” he said.
