The U.S. energy boom was supposed to be a godsend for the U.S. steel industry. Try telling that to about 260 U.S. Steel employees who are slated to lose their jobs even though they make tubular products for oil and gas producers.
The Pittsburgh steel producer said that in August it will indefinitely idle tubular products plants in McKeesport and Bellville, Texas. The company cited continuing pressure from overseas producers that it says are unfairly taking the market away.
The decision comes as U.S. Steel and other domestic producers lobby the U.S. Commerce Department to rule that producers from nine countries are illegally dumping tubular products used by the energy industry on the U.S. market. They claim the steel is being sold at below-market prices or benefits from unfair government subsidies.
A United Steelworkers union spokesman said 157 of the workers losing their jobs are USW members who work at the McKeesport plant. About 20 management employees at the plant also will lose their jobs.
The other 90 or so to lose their jobs work at the Texas mill. Collectively, the layoffs affect about 215 union workers and 45 professional and management employees, the company said.
U.S. Steel employs about 5,000 people in the region.
It is not the first time the McKeesport mill has suffered import-related job losses. U.S. Steel furloughed more than half of its workforce there in December 2012. At the time, the company said it would lay off 142 hourly workers and keep another 95 on the job.
The plant welds sheet steel into tubes for the energy industry and other markets. It can produce 315,000 tons annually.
Imports of tubular products used by the energy industry doubled between 2010 and 2012, according to industry officials. While the energy boom has dramatically lowered domestic steelmakers' energy costs, the industry has been not able to capitalize on that because imports have captured about 25 percent of the U.S. market.
"We will continue to fight unfair trade by foreign competitors who are creating a detrimental impact and threat to middle-class paying manufacturing jobs," U.S. Steel president Mario Longhi said in a statement.
Mr. Longhi said the measures were necessary to return the company to profitability and position it for future growth.
On Monday, union leaders and elected officials reiterated their demands that the government respond by imposing duties on the imports. In February, the Commerce Department's International Trade Administration issued a preliminary ruling that would put duties on imports from eight countries. The ruling excluded South Korea, the largest importer and the worst offender, according to industry officials.
"South Korea, which produces 100 percent of its steel tubular goods for export because it has no domestic market, has managed to conduct business here without regulation or any kind of fair tariff in place," USW president Leo Gerard said in a statement.
Mr. Gerard told reporters last month that the import crisis could end up being worse than the one about a decade ago that resulted in a wave of bankruptcies and consolidation in the U.S. steel industry.
Industry analysts say a raft of expansions targeting energy markets, including about 3 million tons of new capacity added in the United States, exacerbates the problem caused by imports. U.S. Steel was among those eager to cash in, paying $2 billion in 2007 for Lone Star Technologies, a Texas tubular products manufacturer.
On Monday, Gov. Tom Corbett called for tougher enforcement of U.S. trade laws, saying "every day that illegal imports enter the U.S. market below fair value is a day when the security of Pennsylvania's steel manufacturing industry is harmed."
U.S. Rep. Tim Murphy, R-Upper St. Clair, echoed those concerns.
"More than 200 steelworkers are out of a job because [the Obama] administration refuses to enforce the law and put an end to trade crimes committed by foreign countries like China and Korea," said Mr. Murphy, who is chairman of the Congressional Steel Caucus.
A report issued last month by the Economic Policy Institute and a Washington, D.C., law firm concluded that more than 500,000 U.S. jobs are threatened by a surge in steel imports. About 35,000 of those jobs are in Pennsylvania, the report stated.
In the Pittsburgh metropolitan area, about 6,800 people are employed in iron and steel mills and related activities, unchanged from five years ago, according to the state Department of Labor and Industry.
Len Boselovic: 412-263-1941 or email@example.com. First Published June 2, 2014 11:10 AM