McKeesport: Tube City without tubes

Officials say loss of 177 jobs to hit families hard, but city will survive


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News this week that U.S. Steel workers in McKeesport are slated to lose their jobs in August was a blow to many across the Mon Valley, but city officials said Tuesday that the layoffs don't signal financial ruin for the city.

Mayor Michael Cherepko said the personal loss to the employees is "heartbreaking, and I'm saddened by this."

But from a wider economic standpoint, Mr. Cherepko said, "it's a minimal hit, it's a minimal loss."

The Pittsburgh steel producer said it will indefinitely idle the manufacture of tubular products at plants in McKeesport and in Bellville, Texas, due to pressure from what the company called illegal imports of steel piping.

Of the roughly 260 U.S. Steel employees losing their jobs, 157 steelworkers and about 20 managers work in McKeesport. U.S. Steel employs about 5,000 people elsewhere in the Pittsburgh region.

The McKeesport plant, which welds sheet steel into tubes for the energy industry and other markets, can produce 315,000 tons a year.

Since Monday's announcement, political leaders have renewed calls for tougher enforcement of U.S. trade laws. Two weeks ago, more than 500 steelworkers, other union members, elected officials and steel industry executives held a rally on the topic in Munhall.

A recent report by the Economic Policy Institute and the law firm of Stewart and Stewart estimated that nearly 600,000 U.S. jobs in steel and related industries are threatened by unfair imports that are either sold at below-market prices or are subsidized by foreign governments, including about 35,000 jobs in Pennsylvania.

Gov. Tom Corbett has said the state's steel manufacturing industry is harmed "every day that illegal imports enter the U.S. market below fair value."

State Sen. James Brewster, D-McKeesport, said Tuesday that he planned to call an executive from the Marcellus Shale Coalition, a Robinson-based industry group that represents companies involved in shale gas production, to encourage the purchase of local steel.

State Rep. Marc Gergely, D-White Oak, echoed his colleague's sentiments: "We need our domestic partners to buy domestic steel."

The demand for tubular products as a result of the oil and natural gas boom prompted U.S. Steel to resume production at the plant in May 2011. The company took over the operation from Camp Hill Inc., which had leased the mill from U.S. Steel. The pipe mill is on the site of the former U.S. Steel National Works, which once employed thousands and gave the city its moniker, "Tube City."

In December 2012, however, the company furloughed more than half its workforce there, also blaming import-related woes.

Mr. Cherepko and city administrator Matt Gergely, the state representative's brother, both said Tuesday that the U.S. Steel announcement does not carry the financial implications of the closing in 2009 of the DISH Network call center in McKeesport. About 600 people were laid off then.

U.S. Steel has an exemption from paying McKeesport's business privilege tax, meaning the city is losing just wage and local service taxes, they said.

Still, said Maury Burgwin, president of the Mon Yough Area Chamber of Commerce, "any kind of layoff in the Mon Valley is significant." And others noted manufacturing's trickle-down effect.

"This is a community that's been knocked around a lot over the last 30 years," he said. "Every one of these kicks in the ribs hurts."

The resolution of the unfair imports issue is largely in the hands of elected officials beyond McKeesport, said Mr. Cherepko.

Mr. Gergely, the state representative, tried to remain optimistic:

"If something does happen on the federal side [to protect domestic steel], a lot of this could be circumvented," he said. "I don't believe that U.S. Steel put all that investment into a plant to shutter it."

In the meantime, top state officials are discussing how to help.

Sara Goulet, spokeswoman at the Pennsylvania Department of Labor and Industry, said Michelle Staton, deputy secretary for workforce development, spoke Tuesday with a U.S. Steel representative to coordinate the state's Rapid Response service, developed to help workers who are part of a large layoff.

"It's definitely on the right track," Ms. Goulet said.

On nearby Lysle Boulevard, the main drag of the city, Meredith Soanes, manager of the Subway restaurant, said Tuesday that plant workers often come for lunch. The restaurant will remain open, but the layoffs "will hurt us," she said.

Darlene Denson, who works at the nearby BP gas station, said: "I don't know what they're going to do because this is a steel mill area. People grew up to work in the steel mills. Their fathers, grandfathers -- everyone worked there. They just knew they were next.

"That was the way people were feeding their families."


Molly Born: mborn@post-gazette.com or 412-263-1944. Matt Nussbaum contributed.

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