Planned temporary layoffs at U.S. Steel’s Granite City mill will begin the week after Christmas.
About 2,000 metro-east steel workers will begin to be temporarily laid off as the steel manufacturer struggles to compete in a struggling market amid a continuing flood of cheap imported steel.
In October, U.S. Steel Corp. announced the potential idling at the Granite City steel plant as the Pittsburgh-based company considered a consolidation of its North American Flat-Rolled operations because demand for the flat-rolled tubular steel manufactured at U.S. Steel-Granite City Works has declined.
Just before Thanksgiving, the company announced the idling was coming around Christmas. On Thursday, leaders from the United Steelworkers said the first workers will be leaving the plant beginning Dec. 27.
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United Steelworkers District 7 Sub District 2 Director Dave Dowling said another 45 of the union’s members who work at the adjacent Stein Steel plant, which processes slag byproduct of iron and steel making, will be laid off by Dec. 21.
Dowling said the temporary shutdown is unfortunate, especially considering its timing.
“Oh goodness, yes. It’s never a good time,” Dowling said. “It’s perceived as a slap in the face because it’s happening around the Christmas holidays.”
Most of the workers to be laid off will be from the United Steelworkers Local 1899. Local President Dan Simmons said this will affect about 1,275 members. He said he is also disappointed, not only for the plant’s coming idling, but the timing right after Christmas
“Ain’t that something?” Simmons said.
Simmons said he expects the mill’s shutdown to take longer than it did the last time U.S. Steel idled the Granite City plant, from November 2008 to June 2009.
“It will not go as quickly because we have some slab inventory and hot strip will run for another three weeks,” Simmons said. “That will roughly get us into the third week of January. After that, it will take four or five days before the slab inventory runs out. Then, we will shut that down.”
He said the cold mill is expected to close two weeks after exhaustion of slab inventory and anticipates the entire plant should be closed by the middle of February, leaving on a skeleton crew of maintenance workers.
The United Steelworkers Local 50 already has 202 members who were permanently laid off from the Granite City mill’s coke operation last April. Local president Jason Chism said the coming idling only compiles the struggles for local steel workers.
“The timing can’t get any worse with the holiday season,” Chism said. “We’re in horrible times in the steel market.”
Simmons said there is much speculation in the community about the future of the metro-east mill. He expects the plant to reopen at some point when orders pick up.
“Rumors are flying that they’re never going to reopen this place,” he said. “That’s not true.”
Although demand has plummeted, Simmons said the Granite City plant is the only one that can made the quality grade of steel sought by auto makers such as Nissan, which will need the steel manufactured by the metro-east mill for its 2018 model Nissan Altima.
“It’s a grade of steel that no one else can make,” he said. “Other mills have tried it and failed miserably.”
But the market price the Granite City steel mill’s product continues to plunge to the point where it has become too difficult for the domestic steel industry to compete against the ongoing flood of cheap imports. According the latest statistics from the American Institute of Steel and Iron, the price of hot-rolled steel, like what is manufactured in Granite City, has dropped from $684 a ton in May 2014 to $366 a ton now.
Local union leaders have been calling on federal lawmakers to act. Simmons said that even the Asian manufacturers who manufacture this cheap steel are becoming affected and that federal lawmakers need to act.
“The government has to take their heads out of the sand and say this is real,” he said. “It’s imports, imports, imports. Even the Chinese realize they are flooding the market and that they are killing themselves. They are selling that at a loss and have even shut down some facilities because they are at over capacity.”
“The steel market is upside down on us right now,” Chism said. “U.S. Steel has made the decision to do that we have to get to a better place in the steel market. We have a lot going against us with foreign imports.”
This was not the first time U.S. Steel had announced a possible idling this year at the Granite City plant. A similar announcement was made in March but was averted a month later when the company decided to layoff 80 workers instead.
Simmons is hoping for a short work stoppage, but could not predict how long steel workers will be out of a job.
“There is no indication of how long it will last,” he said.
Dowling said the mill should reopen as soon as demand increases.
“That our expectation,” he said. “That is what we expect.”
Steel workers at the Granite City plant and other U.S. Steel mills have also been working without a contract since Sept. 1. Simmons and other union leaders have met several times with management in Pittsburgh but have yet to reach a new deal.