U.S. Steel Corp., the largest steelmaker in the U.S., will idle plants in Ohio, Texas and Alabama as it continues to cut costs amid a global glut that has driven down prices, the company said Friday.
The company said the cuts could affect about 650 union and 120 non-union workers at plants in Fairfield, Ala.; Lorain, Ohio; and Lone Star, Texas; along with its Oilwell Services and sales office in Houston, Texas.
The cuts come after the steelmaker posted a $1.5 billion loss for 2015, compared with a $102 million profit in 2014, as revenue fell 34% to $11.57 billion.
The company warned at the time that it expected results to contract further in 2016 in its four operating segments and adjusted earnings before interest, taxes, depreciation and amortization to break even, given price projections, import volumes and inventory levels.
On Friday, a company representative said the layoffs at the Lone Star plant in Texas were slated to begin last week while the workers at the Fairfield plant were to be idled in April.
Early last year, the Pittsburgh steelmaker announced a move to idle plants in Ohio and Texas and lay off about 756 workers.
U.S. Steel, which has posted annual losses in six of the past seven years, had bet heavily on so-called oil country tubular goods, or OCTG, an industry that was substantially built up to provide pipes and other equipment for the boom in shale gas and new oil drilling in the Gulf of Mexico before oil prices collapsed and companies curtailed drilling.
The segment accounted for $179 million of the company’s $302 million Ebit deficit in 2015.
Source : wsj.com