U.S. Steel to temporarily close Granite City plant, lay off 2,080 workers
26 March 2015
U.S. Steel Corp. announced Wednesday that it will temporarily idle its Granite City steel plant and lay off its 2,080 workers for up to two months as the company completes a consolidation.
The Pittsburgh-based company announced the move will accommodate a consolidation of the company’s flat-rolled steel operations in North America, including the metro-east mill.
Company spokeswoman Courtney Boone said the metro-east plant will temporarily close by or after May 28 and reopen at an undisclosed date. She said some of the laid-off employees will be added back at a later date to operate the reconsolidated plant, but could not say how many workers would be asked back, or when.
Boone said various global economic factors have led the company to make these adjustments.
“There are a number of global economic influences including currency, imports, unfair trade and fluctuating oil prices that impact our tubular business, which Granite City Works supplies,” Boone said.
The announcement took the union by surprise. Dave Dowling, director of the United Steelworkers of America District 7, Sub District 2, in Granite City, said the union has been following factors that have recently challenged the U.S. steel market but was not expecting such a dramatic move.
“For the steel workers this came as a complete surprise,” Dowling said. “We’re aware and have been aware for quite a while that orders for our product have been declining, particularly in our pipe and tube plants. We knew the company was taking steps in response to both Granite City and other locations, but we were not expecting this announcement at all.”
In Pittsburgh, United Steelworkers of America International Vice President Tom Conway released a statement Wednesday that said U.S. Steel’s announcement is a result of the continuing effect of a surge of unfairly traded, record-level imports.
“These imports are landing at a time when the energy pipe and tubular business in oil and gas exploration has been cut in half and crude oil prices remain depressed,” Conway said. “Despite a tariff placed on these imports from Korea, this material continues to ship into the United States.”
Last spring, the union held public demonstrations outside various steel mills throughout the country, including a rally last May in Granite City, to protest the U.S. government’s lax enforcement of trade laws. South Korean steel that has been imported into the United States had been sold below market value and making it difficult for domestic steel mills to complete in the global market.
By July, the Department of Commerce announced that it would impose punitive tariffs on Korean and other foreign steel manufacturers that dump steel pipe in the United States at artificially lower prices. However, Dowling said that this action provides a brief respite for the industry, but cheaper foreign imports have since returned and flooded the U.S. market.
“There was a pause and then the problem started up again,” he said. “We want to be playing on a level playing field. Right now, we’re not.”
Conway said the current U.S. system of trade is “fundamentally broken” and the trade laws need to be overhauled. He said representatives from the union are testifying this week before a hearing of the U.S. House of Representatives Steel Caucus about the current status of the nation’s steel industry.
“We are closely watching this as well as other cutbacks throughout the company and industry and using the tools in out labor agreements to mitigate and minimize the impact on steelworkers and their families,” he said in his statement.
Steelworkers arriving and leaving the Granite City steel mill during the shift change on Wednesday afternoon had mixed reactions to the steel company’s announcement.
“Yes, I was surprised,” said 50-year-old Collinsville resident Randy Miller. “With the oil prices the way they are, that’s what’s affecting us. People think cheaper is a good thing for everybody else, but that is hurting us. The steel imports have really hurt us, too.”
“No, it’s kind of been expected,” said Mike Gentry, 51, of Carlyle. “Everything has been slowing down. We haven’t been making much steel, anyway.”
“Everybody is just wondering what’s going to come next,” said Darrick Tinsley, 42, of Brighton. “I don’t know. I don’t know what to tell you.”
Tinsley and his fellow steelworkers are now pondering what they will do once the steel plant shuts down.
“I don’t know,” said Tinsley, who has worked at the Granite City mill for almost 20 years. “It depends how long we’re out.”
“I’ll have to file for unemployment,” said Gentry, a 17-plus-year employee at the steel plant.
“I guess I will be going on unemployment for a little while,” said Miller, who has been working at the steel mill for the past 30 years. “Maybe I’ll find another job.”
Dowling also said he is hopeful that within the next two months market conditions could improve and lead U.S. Steel to change its plans.
“At this point in time, there is hope,” he said. “There is hope that we would see a change to the existing market that could continue and get better now, and by the end of May that would result in U.S. Steel reconsidering its decision to idle this facility.”