US Steel to idle operations at Zug Island, resulting in 1,500 layoffs

December 20, 2019, 7:47 AM

U.S. Steel says it will idle a "significant portion" of its Ecorse and River Rouge operations as the company shifts production to a plant in Gary, Indiana — a move that will result in approximately 1,500 layoffs.

The plant at Zug Island, seen from the Detroit River (Photo: Nancy Derringer)

The Pittsburgh-based company announced in a media release that it expects to begin idling its iron and steelmaking facilities on Zug Island in April, and its Hot Strip Mill rolling facility by the end of 2020. Limited portions of its Great Lakes Works operation will continue to operate "in line with customer demand," it said.

The layoff news came as the company announced its fourth-quarter performance would fall short of expectations. U.S. Steel shares have fallen about 40 percent since the start of the year. The company's shares were down another two percent following the layoff news, ahead of the stock market's Friday opening.

In a media release mucked up by heavy industry jargon, U.S. Steel more or less said the decision is good for its bottom line.

For those you capable of deciphering manufacturing industry executive-speak, these next two graphs, from the release, are for you:

This decision is another step to advance U. S. Steel’s strategy to become a world-competitive, “best of both” company by combining leading integrated and mini-mill steel technology.  The decision also illustrates U. S. Steel’s capacity to be nimble and accelerate key aspects of its strategy when market conditions warrant.

Commenting on this decision, U. S. Steel President and Chief Executive Officer David B. Burritt said the following: “In order to further accelerate our strategy of creating a world-competitive ‘best of both’ U. S. Steel, we must make deliberate but difficult operational decisions.  In this case, current market conditions and the long-term outlook for Great Lakes Works made it imperative that we act now, allowing us to better align our resources to deliver cost or capability differentiation across our footprint.  Transitioning production currently at Great Lakes Works to Gary Works will enable increased efficiency in the use of our assets, improve our ability to meet our customers’ needs for sustainable steel solutions and will help our company get to our future state faster.”

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