Granite City Steel Layoffs – How Does the Steel Industry Affect?

Granite City Steel Layoff. Granite City Steel faced a tough day as U.S. Steel delivered disheartening news! The company said most of the work at the Granite City plant would stop, leaving about 1,000 workers jobless. Four hundred had already ceased work since October 1, and now 600 would join them. The plant once employed 900 workers. But now, it is anticipated that only around 300 might find alternative employment unrelated to steel production.

The impact extends beyond the workplace and faces significant challenges. The layoff impacted the entire town, heavily reliant on the plant for employment. The person responsible for assisting workers in finding new jobs pledged support starting early next year. For many workers, this isn’t just a job loss. It’s akin to losing a part of their family history, with generations having worked at the plant. Let’s discover the story behind Granite City Steel, where the strength of steel meets a community’s resilience.

U.S. Steel, headquartered in Pittsburgh, explained the decision. It cited the need to align steel production with incoming orders. They thanked the workers for their contributions and promised to keep them updated during these trying times.

On Tuesday, workers receiving layoff notices were informed that they have approximately 60 more days of work before departure, adhering to the company’s obligation to provide sufficient notice. The company estimates that about 60% of those receiving notices will be affected.

In September, the company attributed a temporary work stoppage for 400 workers to decreased steel demand during an auto workers’ strike. However, the workers’ union representative contends that most steel is from this plant. It doesn’t even contribute to car manufacturing.

Concerns rise among community leaders about the company’s motivations. It is speculated that it’s more about avoiding organized workers than responding to market dynamics. Calls for corporate responsibility have been voiced. It emphasized accountability for the impact of decisions.

Amidst these challenges, the company explores potential sales, initially rejecting a bid in August. But later agreeing to include the bidder in the potential sale. Discussions also involve selling the specific plant, potentially leading to 1,000 job losses. The workers’ union leader asserts their authority to oppose such a move.

A state senator from Illinois expresses deep concern, highlighting the severe repercussions for the entire community. Frustration arises as the company seems to turn away from the workers and the community that played a crucial role in its growth over the years.

About Granite City Steel

Granite City Steel started making steel in 1895 in Illinois, thanks to two brothers named William and Frederick Niedringhaus. They began with making sheet iron and later expanded to steel. The company grew in 1951 and became part of National Steel Corp in 1971. But in 2002, National Steel had money troubles and had to file for bankruptcy. U.S. Steel Inc. bought Granite City Steel from them in 2003. When it was going through a tough time, it was renamed U.S. Steel-Granite City Works.

This plant has been made of steel since 1895, even during two world wars. In 2008, U.S. Steel-Granite City Works and another company called Sun Coke Energy spent a lot of money. It was noted that around $600 million was spent on a new plant in Granite City. But in 2015, U.S. Steel said they would stop some of the work at the Granite City plant and laid off around 2,080 workers. Then, in 2018, they wanted to sell part of the plant to SunCoke Energy. It would use it to make something called pig iron pellets.

In January 2023, there was a plan to sell the Granite City Works steel mill. This meant nearly 1,000 people had to lose their jobs. But the people who work there said, “Whether this sale happens or not, the person in charge of the steelworkers union is looking into it.”

Why Is Granite City Steel Laying Off?

According to reports, the potential job losses for workers at Granite City Works are due to a breakdown in the central furnace. U.S. Steel, the owner of Granite City Works, decided to halt the furnace, leading to layoffs for the workers. This decision adds to the uncertainty the workers and the town of Granite City face.

In a recent development, U.S. Steel declined an offer from Cleveland Cliffs to purchase the entire business for a substantial $7.3 billion. Cleveland Cliffs sought a quick agreement without allowing U.S. Steel to conduct a thorough evaluation. 

In response, U.S. Steel’s CEO, David Burritt, conveyed in a letter to Cleveland Cliffs’ CEO. That letter shows they couldn’t agree because they were uncertain if the offer represented the entire company fairly. The situation appears perplexing for workers and the prominent company owning Granite City Works.

Is Granite City Steel Open?

A big factory called Granite City Works, owned by a company called U.S. Steel Corp., had to stop working in 2015 but started again in 2018 after spending $600 million on a new plant. But now, in 2023, they say the factory will stop again. Also, around 260 to 265 steel and iron workers lost their jobs in May.

Even though in October 2023, the factory was not working, and some workers had already lost their jobs. The leader of the workers’ group said there was a plan to sell the factory. If it happens, almost 1,000 people might lose their jobs. But the workers’ group is trying to stop it. Now, the layoffs are happening.

How Does the Steel Industry Affect The Environment?

Making steel is a huge industry worldwide, but it causes a lot of pollution. They need a ton of energy to make steel, and most of it comes from burning coal, which is unsuitable for the environment. This process releases bad stuff like tiny particles and carbon dioxide into the air. Making steel uses the most energy and puts out the most carbon dioxide compared to other industries.

Getting the main ingredient for steel, iron ore, is also not great for the environment. Digging up iron ore can lead to problems like cutting down forests, making the soil wash away, and dirtying up the water.

When they make steel, it’s like a pollution party. The process releases many lousy stuff into the air, like carbon dioxide, sulfur dioxide, and nitrogen oxides. These things can mess up our air, cause breathing issues, make acid rain, and even make the Earth warmer.

But, some companies in the steel business are trying to be better. Instead of burning fossil fuels, they’re using cleaner energy from things like the wind and the sun. They’re figuring out more innovative ways to make steel that doesn’t use as much energy and doesn’t cause as much pollution.

Who Are The Competitors Of Granite City Steel?

Here are some companies that compete with Granite City Steel:

  • Kiwi Services Inc.: They have about 40 people working for them, and they make around $10 million.
  • D & M Carpet Cleaning Inc: This company has less than 25 employees, and their revenue is about $6.4 million.
  • Mr Madison Carpet Cleaning: They have less than 25 employees and make around $6.2 million.
  • Clean USA Co: With less than 25 employees, this company’s revenue is less than $5 million.
  • The Best Restoration: Like the others, they have less than 25 employees, and their revenue is about $5.6 million.
  • On-Time Steam Cleaning: This company also has less than 25 employees, and they make around $6 million.

These companies are in a similar business. But the number of people working for them and the money they make can be different.

The Wrap

In conclusion, the Granite City Steel layoffs paint a challenging picture for workers and the local community. The temporary shutdown of the furnace, owned by U.S. Steel, has led to job losses for many steel and iron workers at Granite City Works. This decision comes at a time of uncertainty for the workers and the town itself.

Adding to the complexity, the recent rejection of a significant buyout offer by U.S. Steel from Cleveland Cliffs further muddles the situation. The refusal to accept a $7.3 billion proposal has left the future of U.S. Steel, and consequently Granite City Works, hanging in the balance. The concerns raised by U.S. Steel’s CEO, David Burritt, regarding the fairness of the offer and the need for a proper evaluation underscore the intricacies of the decision-making process.

The furnace remains closed, and layoffs continue. The ripple effects are felt within the factory walls and reverberate throughout the entire community of Granite City. These developments’ economic and social impact underscores the delicate balance between corporate decisions and their profound consequences on the lives of workers and the communities they support. 

The coming months will likely be critical in determining the path forward for Granite City Steel and its workforce, shaping the narrative of resilience and adaptation in the face of industrial challenges.

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