ArcelorMittal To Idle Hot Strip Mill, Displace 300 Workers

1 April 2016

ArcelorMittal has idled the 84-inch hot strip mill at Indiana Harbor East Chicago as it looks to take capacity off-line in the United States at a time when only 71.6 percent of America's steelmaking capacity is in use.

Production has ceased at the hot strip mill in East Chicago, where more than 300 employees will be displaced. ArcelorMittal currently only has 182 openings, plus 49 mechanical and electrical positions, that union members can bid for, but no one will be laid off, United Steelworkers District 7 Director Mike Millsap said.

"The hot strip mill has been shut down, but we're finding jobs for them," he said. "We're still bargaining over some of that stuff. No layoffs is the goal."

Millsap said it was part of ArcelorMittal's plans to restructure its U.S. operations by shutting down some finishing lines and investing in the remaining ones, so they operate more efficiently.

ArcelorMittal spokeswoman Mary Beth Holdford said the Luxembourg-based steelmaker, which lost $8 billion last year, is considering all options to "optimize its assets" in the United States.

"Action 2020 is a strategic roadmap that aims to achieve targeted financial improvements for the company by 2020," she said. "In the United States, efforts to support Action 2020 include asset and cost optimization as well as an improved portfolio of high added value products. These products will ensure ArcelorMittal is uniquely positioned with a strong technical and product portfolio to serve customer requirements."

Though the company is shrinking its footprint in North America, it's not planning to lay people off, she said.

"ArcelorMittal expects to optimize our assets in the United States without layoffs by leveraging natural attrition," Holdford said.

The company closed a finishing line that had been under-used, and does not anticipate ever restarting it, Millsap said. The union is working to place the affected workers in East Chicago, Burns Harbor or Riverdale, and some may require retraining.

More finishing lines will likely be taken down as ArcelorMittal looks to address a persistent overcapacity problem that was made worse by China's 112 million tons of exports last year, Millsap said. The steelmaker recently shut down the No. 1 aluminizing line at ArcelorMittal Indiana Harbor West.

"There will be more of this," he said. "This was part of their overall capital plan before we started bargaining."


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