Granite City – General Motors’ plans to close five plants next year should not immediately affect U.S. Steel’s Granite City Works but potentially could later, Steelworkers Local 1899 President Dan Simmons said.
In a Belleville News-Democrat report, Simmons said any effects of the closures should not be immediate because the plant has plenty of demand for its pipe and tube products and other products.
“We’ve got a lot of customers,” Simmons said. “We’re kind of diversified in a lot of different markets.”
The plant does make alloys for specialty wheels that can go on the cars, and other U.S. Steel plants make products for them, too, potentially affecting Granite City down the road, he said. The cuts will shut down five plants, one each in Ohio, Maryland, Canada and two in Michigan.
Products from the other plants go into truck beds, hoods, undercarriages, body frames and side panels of GM vehicles, which could lead to U.S. Steel shifting production among its plants, potentially affecting Granite City, Simmons said.
The News-Democrat also interviewed Tim Sullivan, director of the Office of Regional Economic Analysis and an economics teacher at Southern Illinois University Edwardsville, who said there can always be a ripple effect among suppliers when plants are shut down.
“Every facility like a GM plant is going to be buying things from suppliers, whether it’s parts or they hire workers,” Sullivan said. “When they shut down, that means their suppliers then lose part of their sales, which means they lay off part of their workforce. That does ripple through the economy.”
It helps if the supplier and buyer are near each other and their products match up well, he said.
“They might be buying parts from the other side of the country or the other side of the world,” Sullivan said. “On one hand you have multiple layers of protection if the car plant shuts down. On the other hand, it does mean it’s more spread out and less concentrated. If a plant shuts down in Ottawa, it could affect not only a supplier but a supplier’s supplier.”
The News-Democrat asked Simmons if President Trump’s 25 percent tariff on foreign steel is contributing to job losses and lower wages in the automotive industry, but he didn’t see a direct connection.
“At the full 25 percent, if applied to a $35,000 vehicle, it would only equate to a $200 cost increase,” he said. “It’s not going to stop me from buying a $35,000 vehicle if that’s what I’m in the market for, and knowing I’m getting American steel, made in the United States.”