Latrobe Specialty Steel Co. won a $16.6 million contract from the Department of Defense that will give military suppliers priority to buy its alloy steel products used to make parts for helicopters, jet engines and armored vehicles.
The cost-sharing contract the U.S. Air Force awarded the specialty steelmaker late Wednesday covers Latrobe Specialty Steel's vacuum melted and remelted alloy steels, said CEO Hans Sack.
The Latrobe company is installing new vacuum induction melting furnaces and vacuum arc remelting furnaces. It's expected the priority given to the military suppliers will continue for about 10 years, spokeswoman Lisa Pierce said.
The Defense Department sought the agreement because it wants to reduce delays of as long as 72 weeks in filling orders for alloy steels used to make rotor shafts for helicopters, hot sections on jet engines or torsion bar suspensions on vehicles, said Rep. John Murtha, D-Johnstown. Even with Latrobe Specialty Steel running its vacuum induction melting facility at 100 percent capacity, Murtha said lead times lagged.
Latrobe Specialty Steel said it will spend about $53.5 million on construction of new furnaces at its Latrobe plant. The agreement does not give the Defense Department any of the revenues from selling alloy steels used by suppliers to fabricate parts for military applications, Sack said.
The new furnaces will create about 40 jobs at the company's plants in Latrobe, and Sandycreek in Venango County. Sack said about 70 percent of the new jobs will be created at the Latrobe plant, which has more than 500 employees.
The company is continuing to produce test molds in the new furnaces and it expects to bring the project online early next year, Sack said. When production ramps up, additional workers will be hired.
Latrobe Specialty Steel won the contract in competitive bidding, the Air Force said. Additional contracts depend on funding approved by Congress, Pierce said.
A spokesperson for the Air Force could not be reached for further comment.
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