Murtha: Defense Department Awards $16.6 Million to Latrobe Specialty Steel

Press Release

Congressman John P. Murtha, Chairman of the House Appropriations Subcommittee on Defense, announced today that the U.S. Department of Defense has awarded Latrobe Specialty Steel a $16.6 million competitive technology investment agreement for the continued construction of their new vacuum melting facility in Westmoreland County.

The funding, provided under the Defense Production Act, was made available to increase the production capacity for specific vacuum melted or remelted alloys with military applications. There is currently a shortage, and long lead times, for specialty steels essential for military parts like rotor shafts for helicopters, hot sections of jet engines, or torsion bar suspensions on fighting vehicles.

"The Defense Department faces serious shortages of specialty steel that is required to build and maintain equipment necessary to protect our troops," said Murtha. "Latrobe Specialty Steel is running its vacuum induction melting facility at 100 percent capacity, and even then the lead times for military grades of steel were behind by about 72 weeks."

To reduce this shortage, the Department of Defense held an open and competitive bidding process for this cost-sharing project. Latrobe Specialty Steel submitted a proposal, and won the project. Under the agreement, Latrobe will contribute $53.5 million and the Department of Defense will contribute $16.6 million towards the construction of the new $70 million facility. Latrobe's new vacuum melting facility and its support installation will employ approximately 40 additional people in Westmoreland and Venango Counties.

"Everyone at Latrobe Specialty Steel feels honored by the exceptional confidence that the Department of Defense is putting in our company," commented Hans J. Sack, President and Chief Executive Officer. "We learned from Congressman Murtha's outstanding example that our primary obligation is to the men and women in the U.S. military services. We have agreed with the Department of Defense that the orders for the military will have the highest priority in our new vacuum melting facility."

"Latrobe Specialty Steel is an industry leader, and this cost-sharing project is a win-win for the Defense Department and for our region," added Murtha.

The Title III of the Defense Production Act, which dates from the Korean War, provides financial incentives to domestic firms to make investments in production capabilities for critical security needs. The impetus for this specific project came from the Army's Aviation and Missile Command in Huntsville, AL and started in 2004. Three studies spanning more than two years confirmed that a lack of vacuum-melted, iron-based steels hurts troop readiness.

Latrobe Specialty Steel, headquartered in Latrobe, PA, has been in continual business in the same location since 1913 and supplying the aerospace and defense sectors since 1958. The firm employs approximately 800 people.

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