United States Steel Corp. will move forward with plans to idle a blast furnace at its Fairfield Works facility in Fairfield, Ala., President and CEO Mario Longhi said in a conference call Wednesday.
The idling, which is expected to occur in mid-August, is related to raw material inventory, according to U.S. Steel spokeswoman Country Boone.
In June, U.S. Steel updated a federal WARN notice sent out to 1,900 employees at the facility in January stating potential layoffs could impact 1,414 union and non-union employees. Boone said an updated figure for the number of employees that will be affected was not immediately available. The facility currently employs about 1,500, U.S. Steel CFO David Burritt said on the company's conference call.
U.S. Steel (NYSE: X) has been adjusting employment levels at a number of its facilities as it faces challenging market conditions, including a strong dollar and an influx of imports, many of which the company contends are being unfairly traded.
Late Tuesday, U.S. Steel reported a net loss of $261 million, or $1.79 per diluted share. This compares to a net loss of $18 million, or 12 cents per diluted share, during the same period a year ago.
Employment levels at Fairfield have been in flux in recent months. In April the company confirmed 799 employees at Fairfield Works and the Fairfield Tubular Facility had been temporarily laid off, but the company has been gradually adding back to the workforce as production levels have picked up. By June more than 500 employees were back to work at Fairfield, but the company maintained that more layoffs could be down the road.
Fairfield makes two of the products that have seen the sharpest sales decline in recent quarters, flat-rolled steel and tubular products. Sales in the company's tubular segment dropped significantly in the second quarter with the company recording a net loss of $66 million for the segment. This compares to income of $47 million in the second quarter of 2014.
Burritt said the company expects to realize at least $175 million in short-term benefits in the second half of 2015 related in part to steps its taking to adjust production levels, but these benefits will likely reverse as the company is able to bring more people back to work.
"We continue to operate our facilities in line with our order book and are well positioned to respond to customer needs," he said.