Lawsuits cause layoffs for construction workers at steel mill in Pueblo

Shanna Lewis/KRCC
A new facility to produce long rails is under construction at the EVRAZ steel mill in Pueblo. (January 27, 2022)

This post has been updated to reflect a statement from Wanzek Construction

More than 600 workers building a new facility at the EVRAZ steel mill in Pueblo are out of work. The layoffs come after a contract dispute between the construction company they work for and the steelmaker

A subsidiary of EVRAZ North America, the company that owns and operates the mill, is suing Wanzek Construction, a North Dakota-based contractor that is building its new long rail mill in Pueblo. The complaint, filed in December, says the contractor has failed to meet its commitments causing damages of more than $130 million.

In response, the contractor says the steelmaker has not fulfilled its obligations and has made it impossible to get the work done. The builder has filed a counterclaim saying the project is only about half complete and won’t get finished until early 2024. It also says that the cost to complete it will double to some $600 million. 

Additionally, it cites international issues affecting the parent company of EVRAZ North America due to the war in Ukraine. EVRAZ put its North American assets including the Pueblo steel mill on the market last summer.

A statement from David Ferryman, Senior Vice President at EVRAZ North America, said they are transitioning to a new general contractor to complete the work and none of its employees are losing their jobs due to the change.

“The work is not going away,” Ferryman said. “We look forward to retaining many of the project’s current subcontractors as we work to complete the project. We’re confident that these changes will help us to successfully complete the rail mill project…. EVRAZ North America is committed to the growth, longevity, and ongoing success of our operations in Pueblo.”

In a statement, a spokesperson for Wanzek Construction said they're proud of their work and their safety record, and the company is "disappointed in the decision" to cancel the contract.

"We believe this decision was wrongful … At this time, we remain focused on minimizing the impact to the 660 Wanzek employees that we were forced to lay off."

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