U.S. Steel to idle part of Minntac; 680 layoffs expected

Updated: 5 p.m. | Posted: 9:40 a.m.

United States Steel Corp. said Tuesday it will temporarily idle part of its Minntac plant in Mountain Iron, Minn. on June 1.

Company spokesperson Sarah Cassella said 680 Minntac workers have received layoff notices. The Minntac plant employs 1,500 on the state's Iron Range.

The company blamed the layoffs on high inventory levels of taconite amid a worldwide steel glut.

DFL U.S. Sen. Al Franken met Tuesday with Minntac employees on the Iron Range and said he'll continue pushing the Obama administration to crack down on trade practices hurting Minnesota's steel industry.

He said he's concerned the Minntac layoffs may not be the last.

"That's obviously the fear. And we've seen this happen before in the '80s," Franken said. "A number of things have come together, including the dollar being high, including the Chinese economy slowing down, including iron ore coming from Australia."

The global price of iron ore has dropped in recent months, and the company has said global influences in the market — including high levels of imports, unfairly traded products and reduced steel prices — are at play in decisions about its production facilities.

Franken says his impression after a recent meeting with U.S. trade officials was that they are taking the issue seriously.

But state Rep. Jason Metsa, who represents the area that includes the Minntac plant, says the White House and Congress are not doing enough to enforce trade agreements aimed at protecting U.S. interests.

"It's time the lawmakers out there go and fix the agreements so they work. If not, get the heck out of them," said Metsa, DFL-Virginia.

"We shouldn't be reliant on foreign countries to provide us steel. We produced the taconite up here that built the ships and tanks that enabled the greatest generation to win World War II," he said. "It'd be a damn shame if we forget all that and say, 'we can do it in someone else's back yard."

It's a tough political issue, because while U.S. steelworkers are losing their jobs, some U.S. companies are saving a lot of money because steel prices hit a 10-year low this week.

The Minntac announcement is disappointing but not surprising, said Virginia Mayor Larry Cuffe, Jr.

"The domino effect begins, but I knew this was likely coming," he said. "I have friends and relatives and colleagues that work for U.S. Steel and indicated there's been some adjustments in their hours and no overtime in certain areas, and those kinds of things."

Iron Range blogger Aaron Brown, a longtime advocate of economic diversification in the region, anticipates prices will rebound and the jobs will return. But he warns of deeper problems ahead.

"It's a region of booms and busts. Over the long run, the booms and the busts have an effect on culture, on the economy, on the survivability of communities," Brown said. "Iron ore will be back, but the range will suffer in the meantime, so this is a challenge for leaders and community members to try and figure out how to survive this."

Tuesday's Minntac news follows U.S. Steel's announcement earlier this month that it will idle its Keetac plant in Keewatin, Minn., and lay off 412 workers in May.

For now, U.S. Steel says it will keep part of Minntac running, sparing about 800 workers from layoffs. But observers say they don't expect a rapid turnaround for the industry.