Cheap imports claim 2,080 jobs
By CARL GREEN
Granite City – What workers at Granite City Steel had been afraid would happen finally came to pass last week when U.S. Steel announced it was shutting down the plant indefinitely, putting 2,080 people out of work beginning May 28.
Nobody knows whether this will be a short-term or long-term layoff, but no one was suggesting it would be permanent, either.
Both the company and union blamed the reduced demand for Granite City’s products on dumped, under priced Chinese imports.
In a statement, Steelworkers Local 1899 expressed that the layoff could be avoided, or at least short-lived.
“The union remains optimistic that during the 60-day period that market conditions can improve to a level that would make this action unnecessary,” the union said.
It added: “The union intends to continue meeting with the company as we work our way through this difficult time. We will be using all the tools available to us through our labor agreement to minimize as much as possible the impact on our members and their families.”
CAME IN JANUARY
The Granite City plant makes hot-rolled, cold-rolled and coated sheet products with an annual capacity of 2.8 million tons. It had already announced in January the closure of its Granite City coke-making operation, permanently eliminating 176 jobs.
The union has been working to ease that loss, holding a well-attended layoff meeting, providing workers help in getting unemployment benefits, and setting up a resource room where workers could use computers and speak to insurance representatives to help them access low-cost and subsidized Affordable Care Act coverage.
In Illinois, standard unemployment benefits run for 26 weeks and can range up to $569 a week for workers with dependent children, $498 for workers with non-working spouses and $418 a week otherwise.
THE REAL PRICE
OF CHEAP IMPORTS
While local workers braced for an uncertain future, Steelworkers International Vice President Tom Conway and U.S. Steel President Mario Longhi were in Washington last week, telling the House Steel Caucus that Congress needs to toughen its laws against unfair trade practices – and to enforce them.
“Not since the late 1990s have we witnessed the torrent of steel imports,” Longhi said. “Total and finished steel products imported into our market by heavily subsidized command economies increased year-to-year between 22 and 90 percent. The last time we were at these levels, nearly half of American steel companies disappeared.
“American steel companies are being irreparably harmed by illegal trade practices.”
The federal government has failed to enforce its own trade laws, in part by requiring companies to show severe financial damage before taking actions. But that was never the intent of the law, he said.
Conway said the U.S. International Trade Commission needed to act more quickly and more strongly in such trade cases.
“The simple truth is, when we win a case, we simply stabilize the market. We rarely get back to where we were,” he said. “We are ratcheting down our industrial sectors into oblivion. In the process, we hemorrhage good jobs, just like is happening right now in the steel industry.”
Ironically, the European Union last week took just the kind of action Conway was talking about, imposing anti-dumping duties on flat-rolled stainless steel imports from China and Taiwan ranging from 10.9 percent to 25.2 percent for the companies involved.
WALL STREET CELEBRATES
U.S. Steel’s stock price immediately surged upward as investors voted with their money to approve putting thousands of Americans out of work. Shares were up 2.31 percent to $25.26 the day the layoffs were announced.
A decline in the demand from oil and gas drillers for steel pipe, caused by the current low price of oil, was cited as one cause of the shutdown, but the company did not mention that in its public statements other than to refer to “challenging market conditions” and “global influences.”
Meanwhile, in Washington, the American Iron and Steel Institute reported its share of the U.S. market was up to 33 percent in January and February, compared to 28 percent a year before.
It’s not that the industry is in a long-term slump. In 2014, U.S. demand for steel was up 13 percent to 118 million tons.
But this year, demand is down in China, Russia and Brazil, all steel exporters eager to sell to the U.S. market, even at a loss, to keep their industries healthy.
Industry analysts say the dollar’s strength against foreign currencies is making imports cheaper and domestic steel more expensive.
“The steel industry and our workers are under attack from a surge in foreign imports that has reached historic levels,” said Tom Gibson, president of the Iron and Steel Institute.
NEEDS TO ACT
Conway said the U.S. government needed to act.
“If you think I’m frustrated, you’re right,” Conway said.
“The Steelworkers are deeply appreciative of the work of the Steel Caucus over the years; it’s made a real difference. But for us, the issue right now is getting government to act to address the real problems beyond Band-Aids to enforcement.
“Yes, some action has occurred, but it is only scratching the surface.”