By Giavonni Nickson
History seems to be repeating itself with US Steel’s recent decision to idle its tin mill in East Chicago, affecting nearly 300 employees.
U.S. Steel says it plans to offer half of the nearly 300 workers from the tin mill positions at Gary Works steel mill or the Midwest Plant in Portage. The exact number of transfers has not yet been determined but will be subject to discussion with the United Steelworkers union.
Those employees who are not a part of the transfer will lose their jobs.
This marks the second time in four years U.S. Steel has idled the plant that produces tin-plated metal used for canned foods, paint cans, and other tin products.
East Chicago Tin, which U.S. Steel acquired from LTV in 2001, idled its tin mill in 2015 during a steel import crisis. At that time, steel imports had nearly 30 percent of the U.S. market share. U.S. Steel cited an influx of cheap imports as the reason behind the closure in 2015.
Still today, U.S. Steel attributes the layoffs, cuts and closure to a shifting trend with low-priced imported products. Steelmakers are not the only ones seeing this impact.
Food production and distribution company Del Monte announced plans to close two tin canning plants, laying off more than 800 workers. Del Monte cited higher costs due to steel tariffs and an ongoing decline in canned food sales as reasons for their job cuts as consumers across the country move away from canned goods toward fresh foods.
“Following extensive market analysis of our global competitiveness in light of high levels of low-priced imported tin mill products entering the United States, we have decided to consolidate our current tin mill products production from three to two facilities, idling our East Chicago, Indiana, facility by mid-November 2019,” said U.S. Steel in a statement.
U.S. Steel has approximately 5,700 employees across three northwest Indiana facilities with most of their employees at the Gary Works location.
In August 2018 U.S. Steel announced a $750 million revitalization of its northwest Indiana facilities. The five-year Gary project included a building expansion and the installation of new production equipment and technology. Since the 2018 announcement steel prices have fallen drastically, due in part to a global cooling economy and decreased demand. In June, U.S. Steel announced it was temporarily idling a blast furnace at Gary Works in response to decreasing steel prices and changing market demands, but there were no layoffs. Today steelworkers are losing their jobs.
ArcelorMittal USA is laying off 100 workers at the ArcelorMittal Weirton tin mill in West Virginia. ArcelorMittal points to imports, as well as the ongoing decline in the need for tin cans as its reasons for layoffs. Grocery stores nationwide are allocating more space for fresh foods to accommodate the growing consumer demands for fresh foods. This shift directly impacts steelmakers.
U.S. Steel has seen decline in net earnings this year as compared to last year. On August 1, 2019 Pittsburg based United States Steel Corporation (NYSE: X) reported second quarter earnings for 2019.
2019 U.S. Steel Second Quarter Earnings
- Net earnings of $68 million, or $0.39 per diluted share
- Adjusted net earnings were $78 million, or $0.45 per diluted share
2018 U.S. Steel Second Quarter Earnings
- Net earnings of $214 million, or $1.20 per diluted share
- Adjusted net earnings of $262 million, or $1.46 per diluted share.
This substantial decline in earnings provides evidence to support a changing trend and reduced market demand for tin.
In the process of transferring workers out of the idled tin plant in East Chicago, U.S. Steel plans to leverage the significant investments made to the tin milling operations at their other plants to ensure a smooth transition for customers and employees.
Giavonni is a passionate freelance writer native of Gary IN. She covers business, politics, and community schools for the Chicago/Gary Crusader.
