US Steel temporarily lays off 200 workers in Michigan
Posted August 20, 2019 10:35 a.m. EDT
CNN — US Steel is temporarily laying off about 200 workers from a Michigan plant as the steel-making industry continues to falter.
The company notified the state of Michigan earlier this month that it would be laying off employees at its Great Lakes Works factory near Detroit. The layoffs were expected: US Steel said in June it would adjust the number of workers it would employ at its Gary, Indiana, plant in addition to the Michigan plant because of softening demand for steel.
The company said in a statement Tuesday that the layoffs at its Michigan plant affect employees in "nearly every area of the facility from blast furnace operations through finishing operations."
US Steel didn't specify when production levels at the Great Lakes Works facility will return to normal. Layoffs at the factory began in July and will continue through the end of September. The company said it would not make any further employment changes at the Gary plant.
The company has been struggling, with shares down more than 30% since the beginning of the year. Slowdown in demand for Europe and the US manufacturing industry has resulted in plant closures.
The Trump administration placed a 25% tariff on steel imports in 2018. It helped temporarily lift prices as domestic steelmakers no longer had to worry about as much competition from low-priced steel from China and other locations.
Steel customers worried about how much the tariffs would hurt their supply, so they went on a buying binge early in 2018. That also drove up prices. As steel prices and profits rose in the industry, domestic mills brought capacity back up at previously idled mills.
But last year's large rise in steel prices proved to be short-lived.
The supply problems never actually took place. Customers started working off their stockpiles, which cut into overall purchases. Slowdowns in the auto, energy and construction sector also hurt demand. That drop in demand, combined with the increased American production, caused a glut in supply and a sharp drop in prices so far this year.
-- CNN Business' Chris Isidore contributed to this report.