Mittal Steel’s decision Thursday to permanently close a galvanizing line at its West Virginia plant should cause concern for local workers, an author familiar with the steel industry said.
The company announced it will shut down a galvanizing line eliminating about 40 jobs in addition to the more than 800 job cuts announced last fall at the Weirton, W.Va., mill.
“It’s a global industry and Gary, Ind., isn’t very far away from Weirton W.Va., and decisions are being made that indicate the way the whole industry is going under his leadership,’’ said Mark Reutter, author of the book, “Making Steel: Sparrows Point and the Rise and Ruin of American Industrial Might.” “This is very upsetting. This is very bad. Once you start shutting down a steel mill, it’s like dominos tumbling down.”
But Mittal Steel USA spokesman Dave Allen said the decisions occurring at the Weirton operations are meant to make that plant more efficient.
Allen said the company had considered closing the Weirton hot strip mill but reached a deal with the Independent Steelworkers Union that includes keeping it open. The hot strip mill at Weirton employs 200 workers, Allen said.
Weirton will instead focus on tin plate and will use steel slabs shipped in from lower-cost mills in Cleveland and Sparrows Point, Md. That leaves about 1,300 union workers and makes a finishing mill out of the massive factories that once employed about 13,000 workers.
“What we’ve been doing by closing iron making and steel making, and now galvanizing, is getting rid of high cost operations so tin plate can be cost competitive,’’ Allen said.
Allen said the closure of plants at Weirton doesn’t mean that Mittal will follow a similar path elsewhere in the U.S.
On Nov. 29, Mittal announced it would shut down a blast furnace and permanently cease production of raw steel because historically high raw materials and shipping costs have made Weirton Mittal’s highest-cost producer.
But Reutter believes that Mittal CEO Lakshmi Mittal is most interested in operating mills that are the least expensive and that means focusing on Third World countries where workers make substantially lower wages than those in the U.S.
“With an absentee owner or uncommitted owner we’re running the risk of losing what we have,’’ Reutter said. “What we’re seeing is the shrinking of the U.S. steel industry dramatically in the 10 months since there’s been this international ownership of it.”
Reutter says Mittal hasn’t invested enough in the domestic steel mills for capital improvement projects, and fears the local mills could become less productive if Mittal doesn’t spearhead improvement projects here.
“He’s really trying to control the world steel market by shutting down plants to lower the amount of worldwide production and hence keep prices high,’’ Reutter said.
Mittal last week announced a $22.5 billion takeover bid for rival steelmaker Arcelor SA, but said its offer would not mean job cuts.
Meanwhile, the United Steelworkers union continues to support Mittal.
Tom Hargrove, USW Local 1010 president, says he worries about Mittal’s decision to close U.S. plants, but is hopeful that purchasing Arcelor could make the company even stronger. “We’re watching it very closely,’’ he said.
