LaPlace, Louisiana-based Bayou Steel filed for bankruptcy Tuesday, one day after notifying its 376 workers that they would be laid off. The plant is expected to permanently close by the end of November. Bayou Steel specialized in scrap recycling to produce steel beams and merchant bar.
According to local news, the company has as much as $100 million in outstanding debts and less than $50,000 in assets, owing payments to several local businesses and vendors. Bayou Steel has not released a reason for the bankruptcy other than mentioning a “severe lack of liquidity” in its court filing.
Louisiana Governor John Bel Edwards said tariffs are likely behind the bankruptcy. “While Bayou Steel has not given any specific reason for the closure, we know that this company, which uses recycled scrap metal that is largely imported, is particularly vulnerable to tariffs,” he said in a statement to Bloomberg. “Louisiana is among the most dependent states on tariffed metals, which is why we continue to be hopeful for a speedy resolution to the uncertainty of the future of tariffs.”
Other media sources have cited a slumping US manufacturing sector as a possible factor, as recent data released shows the sector contracting for the second consecutive month in September.