U.S. Steel 'Idles' Lorain Plant, Announces More Than 600 Local Layoffs

U.S. Steel announced this week that it will “idle” its steel-making plant in Lorain and, in the process, lay off more than 600 Northeast Ohio workers.

The notably temporary layoffs will kick in around early March, several months in to what spokeswoman Sarah Cassella deems “softening market conditions, primarily related to the energy market.” The Lorain "tubular" plant produces pipes and tubes for oil drilling and hydraulic fracturing around the country. Energy sector observers and anyone who drives a car will of course note the falling price of oil, which is now below $50 per barrel. 

Looking ahead, the market remains bearish at best. "Normally, when you have a collapse in a commodity price, it's in response to some supply-demand shock," Mark Keenan, a cross-commodity strategist at Societe Generale, told CNBC. "[But] you've actually had a change in the supply and demand curve so you can't really apply traditional shock dynamics." 

Despite something of a "fracking" boom in eastern Ohio and much of Appalachia, the planned Rover and NEXUS gas pipelines that will lay across Ohio are being funded and manufactured mostly by out-of-state enterprises (DTE, Spectra, among others). 

The workers laid off at US Steel's Lorain plaint include 277 operating technicians, 172 utility technicians, 73 electrical maintenance technicians, 57 mechanical maintenance technicians and 40 utility workers. Mayor Chase Ritenauer spoke with the Lorain Morning Journal:
Ritenauer said he hopes market conditions improve and the layoffs will be shorter than expected. He added he believes U.S. Steel remains committed to making Lorain a hub of its steel production.

The most troubling effects will be for steelworkers, their families and the local economy in and around Lorain, Ritenauer said.

“It’s upsetting to the families, it’s upsetting to the employees, it’s upsetting to what U.S. Steel is trying to do,” Ritenauer said.

United States Steel employees do good work and the company is a good corporate citizen to have in Lorain, the mayor said. “But they’re at the mercy of the global economy,” he said.

“We don’t have any control over this,” Ritenauer said. “This is way above Lorain, Ohio. This is way above U.S. Steel corporate headquarters in Pittsburgh.”