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First layoffs start this week after U.S. Steel shutters Granite City Works furnace

A man walks past the U.S. Steel Granite City Steel Building on Wednesday, Aug. 30, 2023, in Granite City, Ill.
Tristen Rouse
/
St. Louis Public Radio
A man walks past the U.S. Steel Granite City Steel Building on Wednesday, Aug. 30, 2023, in Granite City, Ill.

The steelworkers union expects 260 to 265 employees will lose their jobs. Pittsburgh-based parent company U.S. Steel has said the layoffs will be temporary, lasting no longer than six months.

Between 260 and 265 steel and iron workers at Granite City Works will be officially out of work starting this week, according to the union local’s president.

Those layoffs come less than two weeks after U.S. Steel, the Pittsburgh-based parent company, said it would temporarily shutter the only operational furnace on the mill’s campus.

Dan Simmons, president of United Steelworkers Local 1899, said the union will host informational meetings on Tuesday for the workers who lost their jobs.

“There's a lot of folks who will be out seeking, I'm sure, other employment,” Simmons said. “And they may or may not ever decide to come back. It's what happens when you get your employer to treat you like they're doing here.”

At the meetings, Simmons said the union will walk through information such as filing for unemployment benefits from the state and getting those laid off employees supplemental pay or insurance over the next couple of months. He expects another 30 to 40 employees to be laid off over the coming weeks too.

 Dan Simmons, president of United Steelworkers Local 1899, at a “fire up” party in June 2018 to celebrate 500 employees going back to work.
Carolina Hidalgo
/
St. Louis Public Radio
Dan Simmons, president of United Steelworkers Local 1899, at a “fire up” party in June 2018 to celebrate 500 employees going back to work.

The news of the layoffs is a blow to local steelworkers and the Metro East town of 27,000, whose economic vitality centers around the health of the mill and its employees.

In its announcement of the furnace’s closure last week, U.S. Steel said the layoffs would last less than six months.

“We do not take these decisions lightly and will continue to monitor and assess market conditions,” Amanda Malkowski, a U.S. Steel spokeswoman, said in a statement. ”It would not be prudent to speculate as to how long we expect the idling to last, but we currently believe that layoffs will last less than six months."

U.S. Steel also cited the United Auto Workers’ ongoing strike for the need to idle the Granite City blast furnace.

Skeptics of the move and U.S. Steel’s motivations — including Simmons, Granite City Mayor Mike Parkinson and U.S. Rep. Nikki Budzinski, D-Springfield, who represents the area in Congress — have said they will monitor whether U.S. Steel actually brings the jobs back.

It could be a way for the company to skirt the federal law, the WARN Act, that dictates how much notice employers must give employees during mass layoffs, they said.

“We're going to be watching very closely to see if those do remain temporary,” Budzinski said.

Enacted in 1988, the legislation requires large employers to give at least 60 days' notice before layoffs. The labor law was designed to protect workers and give them ample time to get training and find other work.

“We hope that U.S. Steel is honorable in their word that this is a short shutdown, but I don't put much faith in anything they say anymore,” Parkinson said.

A man looks for oncoming traffic as he leaves the U.S. Steel Granite City Works steel factory on Wednesday, Aug. 30, 2023, in Granite City, Ill.
Tristen Rouse
/
St. Louis Public Radio
A man looks for oncoming traffic as he leaves the U.S. Steel Granite City Works steel factory on Wednesday, Aug. 30, 2023, in Granite City, Ill.

If found to have violated the WARN Act by not bringing back iron and steel workers by the end of March, U.S. Steel would have to pay each relevant employee an amount equal to back pay and benefits, according to the U.S. Department of Labor.

Budzinski, who started her career working for unions, said she would like Congress to strengthen the WARN Act.

“When layoffs happen in any community, we need more time to prepare both people as individuals, as families and as a community,” she said.

Despite the temporary closure of the furnace, Simmons said the union members’ morale has taken a hit.

“This is brand new to these folks, and the majority of them that are getting laid off have never experienced any type of layoff,” Simmons said.

In the meantime, Granite City Works will operate with around 900 employees and ship in slabs of steel from sister mills in Gary, Indiana, and another in a suburb of Pittsburgh, Simmons said.

Parkinson, the mayor since 2021 and a longtime police lieutenant in Granite City before that, said the community will also feel the impact of the layoffs.

He said restaurants like Park Grill, just up the road for the mill’s campus and a popular lunch spot for employees, will likely see less business during the next couple of months.

“It's going to have a negative effect on all of the secondary businesses,” he said.

A U. S. Steel worker watches as a slab of steel moves through the production process.
Derik Holtmann
/
Belleville News-Democrat
A U. S. Steel worker watches as a slab of steel moves through the production process.

These layoffs come during an uncertain time for the steelworkers and Granite City.

Less than two months ago, U.S. Steel rejected an unsolicited bid from a rival steel company to purchase the entirety of its company. After other companies made offers, the national steelworkers union endorsed the sale to Cleveland-Cliffs Inc. for its pro-labor record, Bloomberg reported.

In the latest development, U.S. Steel allowed Cleveland-Cliffs to participate in the sale process after signing a nondisclosure agreement, meaning the two steel giants could be a little closer to a deal, Reuters reported on Thursday.

Malkowski, the U.S. Steel spokeswoman, said the decision to idle the blast furnace at Granite City Works has nothing to do with U.S. Steel’s potential sale to another company.

Last year, U.S. Steel floated a deal to sell both blast furnaces at Granite City Works to SunCoke Energy Inc. that would permanently cut an estimated 1,000 jobs. The union holds the power to veto the deal, Simmons said.

Both Simmons and Parkinson said they would welcome new owners to keep the 128-year-old mill open.

“If you don't want to be here, sell the plant to Cleveland-Cliffs and let us get on with the business that we've known for decades,” Parkinson said.
Copyright 2023 St. Louis Public Radio. To see more, visit St. Louis Public Radio.

Will Bauer