ST. LOUIS—U.S. Steel confirmed Monday that it has idled the company’s “B’ furnace at its Granite City, Ill. facility in the wake of the UAW strike against the big three U.S. automakers. 

The union representing steelworkers there confirmed the news in a social media post earlier in the day.

What You Need To Know

  • “Following the announcement of UAW strike actions, we are executing our risk mitigation plan to ensure our melt capacity is balanced with our order book. As a result, we have decided to temporarily idle blast furnace ‘B’ at Granite City Works and are reallocating volumes as needed to other domestic facilities to efficiently meet customer demand,” U.S. Steel said in a statement

  • The labor contract calls for the company and the Local Steelworkers to work on a layoff minimization plan

  • The company said it could not predict how long the layoffs would be in effect, but said it currently believes it would last less than six months

  • U.S. Steel acknowledged last month that it is weighing buyout offers

“Following the announcement of UAW strike actions, we are executing our risk mitigation plan to ensure our melt capacity is balanced with our order book. As a result, we have decided to temporarily idle blast furnace ‘B’ at Granite City Works and are reallocating volumes as needed to other domestic facilities to efficiently meet customer demand,” U.S. Steel said in a statement.

“We thank our employees for working to ensure the temporary idling of the furnace will be conducted safely and efficiently. We do not take these decisions lightly and will continue to monitor and assess market conditions.”

The decision Monday comes just days after a UAW strike began against the “Big Three” automakers at three U.S. facilities, including at the General Motors plant in Wentzville. 

It isn’t immediately clear exactly how many employees are affected by the decision. The Local 1899 said in a Facebook post that the labor contract calls for both sides to work on a “layoff minimization plan”.

The company says it expects the layoffs to last less than six months.

U.S. Rep. Nikki Budzinski, D-Ill, said the layoffs would impact hundreds.

“U.S. Steel’s decision to idle operations in Granite City and lay off workers is an outrage. And their effort to blame this announcement on the United Auto Workers strike is a shameful attempt to pit working people against one another,” she said. “I believe in the working men and women of Granite City and the importance of their careers to the future of our local and national economy.” 

“Steel production is a key component of our nation's economic health.  It is also a major source of employment throughout the country and in the State of Illinois, where the steel industry supports thousands of jobs.  Idling blast furnace ‘B’ at Granite City Works—even temporarily—will have a significant impact on its workers and the local economy,” said Sen. Dick Durbin, D-Ill. “I urge U.S. Steel to work closely with the community and employees to ease these impacts and reopen blast furnace ‘B’ as soon as possible.”

The decision comes as U.S. Steel has weighed several buyout offers for the company over the last month.

In a letter to shareholders in late August, U.S. Steel said it had entered into confidentiality agreements with “numerous” third parties and was beginning to share due diligence information with potential buyers.

“Our number one obligation is to uphold our fiduciary duties,” the company wrote in the letter. “This means that we are focused on the path forward for our Company that drives the most value for you — our stockholders.”

Soaring prices have helped fuel consolidation in the steel industry this decade. Steel prices more than quadrupled near the start of the pandemic to near $2,000 per metric ton by the summer of 2021 as supply chains experienced gridlock, a symptom of surging demand for goods and the lack of anticipation of that demand.

The Associated Press contributed reporting for this story.