U.S. Steel to Idle Plants, Lay Off Workers
March 18 2016 - 3:50PM
Dow Jones News
U.S. Steel Corp., the largest steelmaker in the U.S., will idle
plants in Ohio, Texas and Alabama as it continues to cut costs amid
a global glut that has driven down prices, the company said
Friday.
The company said the cuts could affect about 650 union and 120
non-union workers at plants in Fairfield, Ala.; Lorain, Ohio; and
Lone Star, Texas; along with its Oilwell Services and sales office
in Houston, Texas.
The cuts come after the steelmaker posted a $1.5 billion loss
for 2015, compared with a $102 million profit in 2014, as revenue
fell 34% to $11.57 billion.
The company warned at the time that it expected results to
contract further in 2016 in its four operating segments and
adjusted earnings before interest, taxes, depreciation and
amortization to break even, given price projections, import volumes
and inventory levels.
On Friday, a company representative said the layoffs at the Lone
Star plant in Texas were slated to begin last week while the
workers at the Fairfield plant were to be idled in April.
Early last year, the Pittsburgh steelmaker announced a move to
idle plants in Ohio and Texas and lay off about 756 workers.
U.S. Steel, which has posted annual losses in six of the past
seven years, had bet heavily on so-called oil country tubular
goods, or OCTG, an industry that was substantially built up to
provide pipes and other equipment for the boom in shale gas and new
oil drilling in the Gulf of Mexico before oil prices collapsed and
companies curtailed drilling.
The segment accounted for $179 million of the company's $302
million Ebit deficit in 2015.
--John W. Miller contributed to this article.
Write to Maria Armental at maria.armental@wsj.com
(END) Dow Jones Newswires
March 18, 2016 16:35 ET (20:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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