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U.S. Steel Michigan layoffs: Why the U.S. Steel, a showcase for Trump's tariffs, is laying off workers in Michigan



  • U.S. Steel said it is laying off about 200 workers at a plant in Michigan, citing a "diversity of factors" including demand, import volume and lower steel prices.
  • The temporary cuts in the position can last longer than six months.
  • The layoffs come after US Steel said in June that it planned to idle two ovens, at Michigan's Great Lakes Works facility and Gary Works in Indiana, where no layoffs are expected.

US Steel temporarily cuts about 200 workers from the Michigan plant, highlighting the ongoing struggles for a company that President Donald Trump had shown to benefit from his administration's steel tariffs.

The layoffs, described in an Aug. 5 notice with the state of Michigan, will cover "almost every area" at the facility, US Steel said in an email statement Tuesday. The company is already temporarily cutting 48 workers at the Great Lakes plant and expects to cut more in September, bringing the total number of layoffs to 200.

Hints about US Steel problems have emerged in recent months, with Pittsburgh-based company in June that announced they would be idling two ovens, one in Michigan and one in Indiana. The company said there is not a "single incident" that calls for layoffs. Rather, "Current market conditions are affected by a number of factors," including price, demand, import volume, costs and projected profit margins, US Steel said in the statement.

No layoffs are currently scheduled in Indiana, United States Steel said.

Trump: Steel "flourishes"

United States Steel problems appear to undermine Trump's efforts to highlight the steel maker ̵

1; as well as the broader US steel industry – as a recipient of his administration's steel tariffs. Last year, for example, he retweeted a Fox News article about an Indian steelmaker investing in the US, adding that "US Steel adds great capacity as well."

And last June, Mr. Trump spoke at a US Steel plant, highlighting the connection between the administration's tariffs and what he described as new job creation at the company. "Thanks to our tariffs, vacant factories across the nation broke back to life," he said according to a printout.

Mr. Trump added, "And just last month, U.S. Steel announced the reopening of the second blast furnace, well ahead of schedule, meaning nearly a thousand jobs."

Last week, Mr. Trump told an audience at a Royal Dutch Shell plant that steel "was dead" until he released new tariffs on imported steel last year.

"And by the way, steel – steel was dead. Your business was dead. OK? I don't want to be too raw. Your business was dead … And I left a little thing called & # 39; a 25 percent duty & # 39; on all dumped steel across the country. And now your business is thriving, "Trump said, according to comments posted on the White House website. [19659012] Within a year, tariffs have rebuilt our steel industry – it's booming! We placed a 25% tariff on "dumped" steel from China and other countries, and we now have a large and growing industry. We had to save Steel for the defense and automotive industries, both of which are coming back strongly!

– Donald J. Trump (@realDonaldTrump) May 14, 2019

Plunging stock

U.S. Steel's share price has fallen more than 70% since March 2018, when Mr. Trump first announced plans to slash tariffs on steel imports. And despite the Trump administration's efforts, the US steel industry is struggling with a number of problems.

For one, prices for hot-rolled steel coil are down about 37% from the peak of 2018, according to Reuters. This type of steel is used for construction and in the automotive industry, whose growth rates are declining.

The steel industry is also working on a "glut" supply, Bank of America analyst Timma Tammers wrote in a recent note titled "steelmageddon." She predicts that the prices of hot-rolled coil in 2022 will fall even further from recent prices.

New Pennsylvania Factory

U.S. Steel is spending more than $ 1 billion to build a new processing plant in Pennsylvania to lower costs and better compete with its US competitors, something Mr. Trump touted in May in a tweet .

For the time being, workers in Michigan will wait.

"As of now, the market's stagnation of the product is under constant review pending market changes for the better," Andrea A. Hunter, president of the United Steelworkers union local, wrote to members on August 1, informing them of upcoming layoffs.


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