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No layoffs planned at Gary Works when blast furnace idled

U.S. Steel's Gary Works facility is shown. 

U.S. Steel does not plan to lay off any employees when it idles a blast furnace at Gary Works as a result of falling orders, cratering steel prices and more ominous forecasts.

"The current outage at the Great Lakes B2 blast furnace is a planned outage and a decision has not yet been made on which south blast furnace at Gary Works will be idled," U.S. Steel spokeswoman Meghan Cox said. "We currently anticipate there will be no immediate impact on employment levels at either facility. Employees associated with these areas of operation will be reassigned to other roles within their respective facilities."

U.S. Steel announced Tuesday it will idle one of the three south blast furnaces at the Gary Works steel mill on the Lake Michigan shoreline, and leave it offline until market conditions improve.

The Pittsburgh-based steelmaker, one of Northwest Indiana's largest employers, does not know when that will be.

"It would not be prudent to speculate as to how long we expect current market conditions to last," Cox said. "All operational decisions, including restarting one or both of these blast furnaces, are guided by market conditions. We will continue to monitor market conditions and reassess operational status as necessary."

Despite the Section 232 tariffs of 25% on most foreign-made steel, the U.S. steel industry is again in a rough patch, said New York City-based steel analyst Charles Bradford.

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"The problem is the price of steel has collapsed," he said. "It was $900 a ton back in October, and now it's down to $550 a ton. U.S. Steel brought too much capacity back online. The hope is that taking down blast furnaces will help the market."

As a result of the tariffs that were imposed last year, U.S. Steel restarted two blast furnaces at Granite Works in Illinois and resumed construction of an electric arc furnace in Alabama.

U.S. Steel urged employees in a memo not to "view the situation as 'here we go again.'"

"Instead, we believe this is a demonstration of our evolution toward becoming a truly high-performance organization capable of rapid response to market changes, and a company that is timely and transparent with our employees when action is needed," the company said in the memo.

The company said the plunge in steel prices and an expected decline in automotive sales forced it to take capacity offline.

"As we've discussed many times, there is something about this industry and the work we do that are outside of our control," U.S. Steel said in the memo. "In this case, prices have fallen dramatically in a relatively short period of time, and the impacts across our industry are widespread. There have also been significant 2019 forecast changes for certain end-use markets we serve, most notably automotive. These are the facts we must confront, manage and overcome."

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Business Reporter

Joseph S. Pete is a Lisagor Award-winning business reporter who covers steel, industry, unions, the ports, retail, banking and more. The Indiana University grad has been with The Times since 2013 and blogs about craft beer, culture and the military.