U.S. Steel still battling industry downturn
Updated 1:23 p.m., Jan. 27 with U.S. Steel earnings - U.S. Steel is not anticipating a strong year and that could further cloud the uncertain future for its Granite City operation. Under current conditions, the company says it expects lower results this year, compared to the $1.5 billion loss it posted for all of 2015.
It is still having a tough time with lower-priced imported steel, which the company contends is unfairly traded.
"We look forward to having our trade rules enforced effectively and seeing the improved and sustainable order rates that will allow us to bring our facilities back online and put our employees back to work," Chief Executive Officer Mario Longhi told analysts Wednesday during a quarterly conference call.
U.S. Steel is reporting a fourth quarter loss of roughly $1 billion, compared to a profit of $275 million for the same period a year earlier.
It has made production cuts throughout the country, including the idling of the Granite City plant, which employs about 2,000 workers in the Metro East.
"These decisions have significant impacts on our employees, their families and the communities we operate in. And, we do not take them lightly," said Longhi.
U.S. Steel has not stated when full production might resume at Granite City Works.
Updated 5:45 a.m., Jan. 25 with local delegation decision to postpone D.C trip - A delegation from Madison County is now expected to go to Washington, D.C., early next month to convince lawmakers that more action is needed to help the U.S. steel industry.
The trip was planned for early this week, but has been postponed because of the weekend blizzard in much of the eastern parts of the country.
The group wants federal officials to move more quickly in dealing with lower-priced steel from other countries, which is considered a key reason behind U.S. Steel’s decision to idle Granite City Works and lay off roughly 2,000 workers in the Metro East.
"Because of the impact of those layoffs throughout the community, it's probably going to cause about another 5,000 other workers to be impacted,” Madison County Board Chairman Alan Dunstan told St. Louis Public Radio.
“So, for Madison County this is a very important issue.”
The group will meet with area congressmen and officials from offices dealing with trade enforcement and anti-dumping regulations.
Members would eventually like to open discussions with U.S. Steel representatives about possibly making more than one type of steel in Granite City. Before the idling process started, it was only pumping out products for the petroleum industry and the drop in oil prices has led to a steel surplus.
“So what we're going to try is also meet with Granite City steel officials to try to change the way they configure their plant,” Dunstan said.
The Madison County Board unanimously approved a resolution last week calling on Congress to take action to combat the process known as illegal steel dumping. That could involve closing trade loopholes and increasing tariffs.
The Granite City operation could also receive a boost from an international automaker.
Nissan is looking for a plant in in the U.S. to produce a new type of steel and Dunstan says the Metro East mill could be ideal for the initiative.
“There were 24 criteria that had to be made and they did a test at Granite City. They got approved for 23 of those criteria, there’s still one that they are working on.”
Nissan has not set a timeline for a decision on a deal that could boost Granite City Works and the Metro East economy.
Even if a contract with the automaker is not reached, Dunstan is convinced production will eventually resume at the operation.
“U.S. Steel has put a lot of money in this plant.”
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