US Steel to Idle Granite City Plant, Layoffs for More than 2,000 Sean Gallup/Getty Images

US Steel to Idle Granite City Plant, Layoffs for More than 2,000

It's all part of US Steel's plan to consolidate its North American flat-rolled steel operations, as the industry deals with falling prices, slowing demand and competition from other places like China.

The closing of a steel plant in Southern Illinois, just across the Mississippi River from St. Louis, is sending a ripple through the communities that have grown up around it for more than a century.

United States Steel Corp. (IW 500/73) announced it would be idling operations at the Granite City, Illinois, plant. And while it’s expected to be temporary, more than 2,000 workers will be laid off beginning May 28, according to the Chicago Tribune. It’s not known right now how long the layoffs will last.

It’s all part of US Steel’s plan to consolidate its North American flat-rolled steel operations, as the industry deals with falling prices, slowing demand and competition from other places like China. The industry has also been hit hard by falling oil prices that have drillers holding off on buying new equipment.

The Granite City operations have been a target for cuts as U.S. Steel, the nation’s number two producer, tries to get costs in line. In January the company said it would idle two pipe plants, temporarily close one of two blast furnaces, and completely close the coke production facility at the mill.

All the closings and idling add up to nearly 1000 jobs lost. Doug May, a trustee of U.S. Steelworkers Union 1899, has worked at the Granite City mill for more than 40 years. He told the Tribune, surrounding communities will be hit hard, “These are great, family supporting jobs,” May said. “With it being one of the biggest employers in the Metro East, I think it will have a big impact throughout the St. Louis region.”

The “temporary” tag giving by U.S. Steel to this closing is very vague, and the union, employees and communities are holding out hope that things could change for the better in the next 60 days, and the layoffs would be canceled.

The strong dollar and weaker foreign currencies have led to a surge in steel imports. So far in 2015, imports are up 33% from 28% in 2014, according to the American Iron and Steel Institute. Meanwhile, domestic steel operations are running at about 70% capacity, the lowest since 2009.

The United Steelworkers Union is blaming the shutdowns and current state of the country’s steel operations on the increased imports, saying they've led to unfair trading.

City leaders say they’re preparing for the closing, but that a domino effect is likely to spread throughout area.

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