The Morning Journal (Lorain, OH)
U.S. Steel to idle Lorain operations
United States Steel will idle its Lorain Tubular Operations plant indefinitely, cutting 250 jobs, according to plans from the company.
U.S. Steel announced the job cuts starting May 24 and continuing through July until the Lorain plant is idled safely.
On March 23, the company sent a notice to state and local officials about the upcoming reductions at the Lorain facility, which manufactures seamless tubular pipe.
“The action is a result of weak tubular market conditions, including continued high levels of imported tubular products which are impacting demand for the facility’s products,” said the U.S. Steel notice sent to the Ohio Department of Job and Family Services.
The company sent a notice pursuant to the federal Worker Adjustment and Retraining Notification, or WARN, Act.
The company also advised workers at the Lone Star Tubular Operations in Lone Star, Texas, about idling operations “due to challenging market conditions and high import levels.”
The Texas layoffs could affect about 600 workers, said Meghan M. Cox, manager of external communications for U.S. Steel.
“While we do not expect to lay off that number of employees, the total number of employees impacted will depend on operational and maintenance needs,” Cox said.
The United Steel Workers Local 1104 closed to the public as of March 18.
Local USW President Onika Rivera was not available for comment.
Mayor responds
“I did receive a letter indicating that they plan on shutting down operations in the next several months based upon the fact that they can’t compete with foreign steel suppliers,” said Lorain Mayor Jack Bradley.
The reason for that is that the United States has not been uniformly imposing tariffs on foreign steel suppliers, Bradley said.
Because of that, foreign suppliers and purchasers are “gaming” the system, with each paying half of the tariff and keeping the price lower than U.S. Steel, the mayor said.
Or, they just wait to buy until after the tariff ends, he said.
“In any event, it deprives manufacturers in the United States from selling their products like they should be,” Bradley said.
Upon receiving the notice, Bradley said he reached out to staff of Sen. Sherrod Brown, a Democrat, and Sen. Rob Portman, a Republican.
Both have supported American steelmakers, have called for fair trade conditions and have toured the Lorain plant.
Senate reaction
In a March 24 conference
call with reporters, Portman said three provisions within a national economic stimulus bill could help workers at the Lorain factory.
Firstly, the company could benefit from tax relief on payroll taxes and net operating losses, he said.
U.S. Steel also might get a federal Exchange Stabilization Fund loan that the company might not be able to get through a commercial lender, Portman said.
“We need to get this passed because companies like this are eager to be able to get a loan and frankly they might not get a loan from the commercial bank, but they can get it through this process, through Fed and through treasury,” he said.
Small business loans that become grants also could help, depending on the size of the company, Portman said.
“These things will help and help right away to be able to just keep our economy moving,” he said. “We do not want more people laid off right now; we want to keep people at work to the extent possible.”
That is partly to due to workers keeping their savings and retirement plans, but also because people are happy to keep connections to their employers, the senator said.
Meanwhile, Russia and Saudi Arabia are in a price dispute that drives down the cost of oil, Portman said.
That is good news at the pump for consumers, but the oil and gas industry is in a depression for production right now, he said.
With prices so low, it is not profitable to have a drill working or to buy pipe from U.S. Steel, Portman said.
Bradley said he hopes the senators will examine the situation and put tariffs in place that put United States manufacturers on an even playing field with their foreign counterparts.
“We know we produce a superior product, but price sometimes trumps quality of the product,” he said.
With pressure from Ohio senators, Bradley said he hopes President Trump will do the right thing to protect American manufacturers.
Official reports
U.S. Steel published its first quarter results March 20.
The report did not include specific references to Lorain, but it noted challenging conditions for the tubular market.
The company’s annual report said the Lorain Tubular Operations No. 3 facility has the capability to produce 380,000 tons annually in outside diameter sizes from 10.125 to 26 inches and has quench and temper, hydrotester, cutoff and inspection capabilities.