U.S. Steel reducing number of layoffs with idling of Minntac plant

8 May 2015

Thanks to an agreement with its union, U.S. Steel will lay off only about 400 instead of 700 workers when it reduces production June 1 at its Minntac taconite plant in Mountain Iron, Minn.

United Steelworkers Local 1938 and the company finalized an agreement late Wednesday, said union Vice President John Arbogast.

To reduce layoff numbers, Minntac will adopt a 32-hour workweek for some employees. A series of maintenance projects done during the idling also will save some jobs, Arbogast said in a posting on the union website.

Right now, Minntac workers average 40 hours a week, though some work in 12-hour shifts, alternating between 36 hours one week and 48 hours the next, with select days off to even out the math each month, union officials said.

Voluntary layoff forms will be distributed to workers Thursday. The union will meet again with Minntac officials Friday to learn the company’s layoff estimates by department.

“We will continue to post additional information as it becomes available to us,” Arbogast said.

U.S. Steel originally announced in late March that the global iron-ore pricing slump and the rush of underpriced steel imports into the country would force it to idle about half of its Minntac operations in Mountain Iron.

That bombshell fell after U.S. Steel’s March 12 announcement that it would idle its Keetac plant in Keewatin this month, affecting 412 workers.

The layoff reduction at Minntac is welcome news and comes after a tumultuous few weeks.

Iron ore producer Magnetation LLC in Grand Rapids idled its Keewatin plant last month, affecting 41 workers. This week, the company filed for bankruptcy this week after learning that its key customer and investor, AK Steel, publicly worried about Magnetation’s liquidity issues and its global pricing woes.

By filing for bankruptcy protection, Magnetation successfully won a debt restructuring agreement and said it will continue operating its four other plants in Minnesota and Indiana.

Cliffs Natural Resources also said last week it would idle its Empire taconite plant in Michigan instead of one in Minnesota, where it runs Hibbing Taconite, United Taconite and North Shore Mining. That brought some relief to local steelworkers, but there is also concern that Cliffs will eventually need to also slash costs in Minnesota.

It all depends on how low taconite prices fall, said John Rebrovich, assistant to the director for United Steelworkers District 11 in Eveleth. Global iron ore prices are 60 percent lower than they were a year ago.