U.S. Steel to idle part of production at Minntac plant, 680 Layoffs Expected

1 April 2015

U.S. Steel Corp. said Tuesday it plans to idle part of its Minntac plant at Minnesota's biggest iron mine, resulting in about 680 layoffs.

It's the latest symptom of a downturn in the American steel industry that has taken a heavy toll on the Iron Range of northeastern Minnesota. U.S. Steel cited high steel imports, dumping of foreign steel and low steel prices in its announcement.

U.S. Steel spokeswoman Courtney Boone said the layoffs are temporary at the Mountain Iron facility, which employs about 1,500 workers, but that the company can't speculate how long they'll last. She said that will depend on market conditions and customer demand. Three of the plant's five iron ore processing lines will be shut down, she said.

"This is not a permanent adjustment," Boone said.

About three weeks ago, Pittsburgh-based U.S. Steel said it would idle its Keetac plant in nearby Keewatin effective May 13, resulting in 412 workers laid off. And Magnetation LLC announced in February that it was shutting down its Keewatin plant, resulting in about 20 job losses. The mining region is about 200 miles north of Minneapolis.

U.S. Sen. Al Franken, a Minnesota Democrat, said he would travel to the Iron Range on Tuesday to meet with affected workers and local officials. He said in a statement that the announcement "is not only devastating to the laid-off employees and their families, but also to the economic well-being of the entire region."

Franken said the Minntac and Keetac layoffs are a "stark reminder" of the need to fight unfair foreign trade practices. He said he discussed the problem with trade and economic officials at the White House last week and would contact them again.

Domestic steel companies say they have been grappling with a market being flooded with cheap steel exports, mostly from Asian counties, and that increasing iron ore production in Brazil and Australia has depressed ore prices.

U.S. Steel's president and CEO, Mario Longhi, told the Congressional Steel Caucus last week that the country hasn't seen such high steel import levels since the late 1990s.

"Total and finished steel products imported into our market by heavily subsidized, command-economies increased year-to-year between 22 to 90 percent," Longhi testified. "The last time we were at these levels, nearly half of American steel companies disappeared."

Company officials told leaders of United Steelworkers Local 1838, which represents Minntac workers, that its projected taconite pellet supplies are 3.2 million tons more than its steel mills need, or about four months' worth of production on the lines that will be shut down, the union said in a message posted on its website.

Local 1938 President Jon Malek told his members that the governor's office will assist workers in signing up for unemployment benefits and health insurance and that the union would apply for trade adjustment assistance, which extends the duration of unemployment benefits for workers who lose their jobs because of increased imports.

"The magnitude of this first round of layoffs came as quite a blow and the logistics of this will be quite a lot to deal with," Malek said. "This is not the first time your leadership has had to deal with this and we will work our way through all the hard times that we as Steelworkers have come to accept as being part of the industry."