U.S. Steel will 'temporarily' close Granite City facility, will lay off 2,000 workers | St. Louis Public Radio

U.S. Steel will 'temporarily' close Granite City facility, will lay off 2,000 workers

Nov 24, 2015

Updated at 1 p.m., November 24, 2015, to include comments from a union representative:

Dave Dowling, the sub district director for the United Steelworkers union, says he doesn't expect to know the date of the plant's idling for about two weeks.

Updated at 6 p.m., November 23, 2015:

U.S. Steel is going through with temporarily idling its Granite City operations.

In a statement released Monday, the company said it is consolidating its work force to match declining customer demand, citing fluctuating oil prices, depressed steel prices and unfairly traded imports. 

Last month, the company sent notices to about 2,000 plant employees about potential layoffs as required by federal law, despite saying it wouldn't shutter the plant earlier in the year.

 U.S. Steel's operations in Indiana, Michigan, Pennsylvania and Alabama won't be affected. A company spokeswoman said no final work date has yet been set.

Updated at 11:20 a.m., October, 7, 2015:

In a reversal, U.S. Steel said it is again considering temporarily idling its Granite City plant as it examines a consolidation of its workforce. The company said in May that it would not shutter the operation, after previously announcing it would.

In a statement Tuesday, the company said it has sent notices to about 2,000 employees there ahead of potential layoffs. The company cited fluctuating oil prices, low steel prices and "unfairly traded imports" as contributing factors.

The company will continue its operations in Indiana, Michigan and Pennsylvania. Dave Dowling of the United Steelworkers union says workers had gotten a reprieve last May when the company reversed course on a previous decision to shutter the plant.  But he says this latest news was unexpected. "The announcement has created a lot of anxiety amongst our members. It's just impossible to make plans for one's future when one's wondering if their job is going to exist within a few months, Dowling said." Dowling said the union is in the midst of tough negotiations with the company over a new contract, particularly over health care coverage. While he says it's possible, Dowling says he's seen no evidence the company's latest move is a bargaining tactic.  Our previous story, as of May 28, 2015: 

U.S. Steel now says it will not be temporarily shutting down its plant in Granite City. The company announced on Thursday that it will continue to operate one blast furnace and another will be off while new equipment is installed.

U.S. Congressman Mike Bost’s office says about 80 workers will be laid off as production is modified.

The steel maker had announced plans in March to temporarily idle the plant in a move that would have affected more than 2,000 workers (see below.) The company closed coke ovens in Granite City earlier this year, leaving 176 people out of work.

Our earlier story:

A Metro East community is dealing with the temporary shutdown of a major employer for the second time in less than a decade.

U.S. Steel says 2,080 workers will be laid off following the decision to "temporarily idle" its Granite City Works operation. The steel mill rebounded from a similar decision in 2008, but Granite City Mayor Ed Hagnauer believes the impact could be more devastating this time.

U.S. Steel owns the old Granite City steel mill.
Credit File photo | Davd Schaper|NPR

"Because of shutting down the coke ovens, it becomes a little different animal for us."

U.S. Steel closed coke ovens in Granite City earlier this year, leaving 176 people out of work. The Pennsylvania-based company said those facilities had been around for three decades and were no longer efficient.

Wednesday's announcement is part of an effort to bring North American steel production in-line with customer demand.

In a statement, U.S. Steel says it routinely makes adjustments to "reflect market fluctuations." It plans to maintain steel making operations at facilities in Alabama, Indiana, Michigan and Pennsylvania.

The decision to shut down indefinitely in Granite City comes as a surprise to municipal leaders.

"We thought all along that the facility was moving forward and improving," Hagnauer told St. Louis Public Radio.

"I guess the biggest thing was shock. We just weren't expecting anything like this."

The city's website lists U.S. Steel as the community's leading employer with 2,250 workers.

"We have been trying for years to diversify," said Hagnauer.

"But the problem is when you have a steel mill this size, it's really hard because most of the people that are wanting to be involved in our area have something to do with steel."

Granite City, Illinois Mayor Ed Hagnauer
Credit Granite City website|granitecity.illinois.gov

Madison County Chairman Alan Dunstan, in a statement, said the news is a "devastating blow to the thousands of families who will be affected by the plant's closing."

"The closing also impacts the thousands of people employed at satellite businesses which serve the Granite City plant", Dunstan said.

According to Dunstan, Madison County is working with the Illinois Department of Commerce and Economic Opportunity to deploy a "Rapid Response Team" that will help furloughed workers with available programs and services.

Granite City has other plants, including a rail car manufacturer ASF-Keystone/Amsted Rail, Prairie Farms and Kraft Foods.

Hagnauer has not heard if Wednesday’s merger announcement involving H.J. Heinz and Kraft Foods Group will affect operations in Granite City.

The setback at the community's largest employer is another in a series of cuts this year at U.S. Steel.

The company has potentially slashed nearly 4,000 jobs from operations in Indiana, Texas, Ohio, Minnesota, Illinois and Alabama.

At least one analyst believes the drop in global crude oil prices is a key factor in the reductions.

Bradford Research Inc. industry analyst Charles Bradford told The Times of Northwest Indiana earlier this year the oil drop halted drilling activity and that lessened demand for steel.

The industry is also coping with cheaper imports, which benefit from a strengthening U.S. dollar.

In Granite City, Mayor Hagnauer is trying to stay somewhat positive.

"We'll scramble back. Our people are resilient."