US Steel plans old furnace shut down; Fairfield worries, county hopes for future investment

19 August 2015

US Steel was once the largest employer in Birmingham, employing 15,000 workers at its Fairfield operations where steel was made.  

The way steel has been made in the Birmingham suburb has changed over the years. It's been a blast furnace, the pipe operations have varied, and it's been shut down completely twice in the 80s.

It continues to change - this week, the Pittsburgh-based company announced it would be shutting its blast furnace down permanently. About 1,100 people will lose their jobs as a result, starting in November.

"When you look at the 1,100, you have to multiply that by four, because each one of those employees represents at least four people in their household who are depending on the checks from U.S. Steel," Fairfield Mayor Kenneth Coachman said. "It is not a good day for the city of Fairfield, socially or economically. We do know that many of the people who work for U.S. Steel live in outlying areas. There are a few who live within the city of Fairfield, though not as many as did in the late '70s and early '80s when the entire mill became idle."

There's a glimmer of hope in US Steel's decision to locate their new electric arc furnace in Fairfield. It's a massive project that will bring more than $277 million in capital investment to the county. But it takes a lot less labor to support - US Steel estimates it'll employ about 300. And that comes at a price - the county has agreed to $14 million in tax abatements over the course of 10 years.

At the time, a US Steel representative told commissioners that the blast furnace was at the end of its lifecycle, but it didn't announce any plans to permanently close it.

"The County was well aware that the electric arc furnace would replace the old technology blast furnace at some future date," Commissioner David Carrington said in an email. "Unfortunately, due to market conditions, a seamless transition to the new technology was not possible."

United Steelworkers International Vice-President Tom Conway said the union is in discussion with US Steel about staffing needs when the new project is underway and will expand the union's existing career development programs for those who will leave the company.

US Steel is legally in unincorporated Jefferson County, meaning it doesn't pay taxes to Fairfield, a city that has recently struggled to pay its city employees. But some of its residents work there - and what's more, those who don't live there will buy gas in city limits or stop at the local Walmart. So a reduced workforce will likely result in a reduction in sales tax dollars in a city that desperately needs them.

The steelmaking business has struggled in recent years, and companies have primarily cited unfair trade practices that disadvantage American steel against foreign competition, especially China. US Steel sells steel pipes and tubes to oil and gas drillers, so the company has also cited fluctuating oil prices.

"There can be no doubt that US Steel's decision to shut down the blast furnace and other operations in Fairfield, months before its new electric arc furnace comes online, was the result of unfairly traded foreign steel imports," USW International President Leo Gerard said in a statement. "In particular, China has repeatedly violated international trade rules to bolster its state-owned industry while dumping its products into our market, and American workers have already paid the price."