Temporary Layoffs Coming To U.S. Steel

Credit: Daniel Acker/Bloomberg

The United States Steel Corporation is set to temporarily lay off workers at its Great Lakes facility in Michigan.

Pittsburgh-based US Steel made a decision to slow down production at its Great Lakes facility, for which it is ready to temporarily let go of 200 workers. The company said in mid-June that it would idle two blast furnaces, one at the Great Lakes facility and one at the Gary Works plant. The company cited lower steel prices and lower demand as its reasons for the decision.

The layoffs coming to the US Steel Great Lakes facility could last longer than six months. What we know for sure is that the layoffs will affect every level of the plant’s operations, as the blast furnace will be shut down and finishing operations will be slowed down. The layoffs also call President Donald Trump’s comments on the resurgence of the American steel industry into question. Trump reiterated last week that his 25% tariffs on foreign imports has turned “a dead business” into a “thriving enterprise.” Indeed, in the aftermath of Trump’s tariffs, steel prices initially rose, but weakening demand in the auto sector and others has caused steel prices to fall again. 2018 saw a resurgence in American steel, but the price of hot-rolled coil is down 37% from its 2018 peak. The stock price of US Steel is down 73% from March 1st, 2018, when Trump first announced his campaign to crack down on foreign imports.

Government intervention in the American Steel industry is already on the table. The city of Gary and the State of Indiana have offered tax breaks in exchange for investments into modernizing the Gary Works plant. The Gary Works plant is the largest steel plant in North America, and the state’s tax incentives come on the condition that the facility keep at least 3,875 jobs.

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