US Steel, the largest steelmaker in the US, announced late Tuesday its plans to idle production at three of its plants, affecting 3,500 of its employees.
Plants in Granite City, Illinois, Keewatin, Minnesota, and Detroit, Michigan will all be idled indefinitely, the company said.
US Steel plans to temporarily concentrate production at Mon Valley Works near Pittsburgh; Gary Works in Gary, Indiana; Fairfield Works near Birmingham, Alabama; and Lake Erie Works in Nanticoke, Ontario.
"We believe that our difficult decision to temporarily consolidate our production is a necessary response to current market conditions," said US Steel chairman and chief executive John Surma in a statement.
The company did not give an estimate as to how long the temporary idling will last, citing uncertain market conditions. The plants will remain on "hot idle," which means some employees will remain on duty to maintain blast furnaces and other machinery so that the sites will be ready to restart operations.
Due to the combined production cuts among steelmakers across the country, US steel producers are only operating at about half of their total steelmaking capacity. Raw steel production data released this week by the American Iron and Steel Institute show that for the week ended November 29, 2008, capability utilization among US mills was at 50.2 percent. This compared to 88.5 percent in the same week of last year.
In other North American steel production cutback news, Canadian steelmaker Lakeside Steel Inc. announced Wednesday the temporary layoff of 40 hourly workers at its manufacturing facility in Welland, Ontario. Earlier this week the company announced it had permanently reduced its salaried workforce by approximately seven percent.