Lower than three months after the ink dried on the Nippon Metal buy of U.S. Metal, the brand new Japanese homeowners have introduced they’ll shut U.S. Metal’s Granite Metropolis Works in Illinois. The plant will cease making metal in October, and the 800 workers will stay “employed” at their present pay to “keep” the ability’s steelmaking capability till the top of 2027. That’s when the protections in opposition to layoffs they acquired below the U.S. Metal gross sales settlement will run out.
The Granite Metropolis employees have seen this film earlier than. The plant, which began producing metal 125 years in the past, was closed initially of 2016. It’s one in every of U.S. Metal’s blast furnace mills, a conventional method of constructing metal by melting iron ore, amongst different steelmaking components.
When a New York Instances reporter visited in November 2016, the human value was evident. The union web site was telling the still-idle employees concerning the union’s meals financial institution and the place they might decide up donated turkeys for Thanksgiving.
President Trump started his American metal rescue operation in 2018 with the “Part 232” tariffs. Consequently, the Granite Metropolis Works mill obtained a brand new lease on life. Nonetheless, the blast furnaces have been shut down once more in 2019 and 2023, and the remaining processing of metal from metal slabs is being terminated. In a few years, the house mortgage foreclosures will begin.
It isn’t solely the human value; there’s a strategic, nationwide safety dimension to all this. Blast furnaces are how a rustic makes new metal from iron ore as an alternative of by melting scrap steel. When the primary Trump administration imposed metal tariffs in 2018, the Commerce Division’s Part 232 metal report mentioned the nation’s blast furnace mills’ capability went from 38 amenities in 1975 to 13 amenities by 2016, primarily on account of a mix of import penetration, Chinese language overcapacity making it expensive to make metal right here, and a decarbonization push.
With these mills shutting down or producing little or no, Commerce warned that additional losses would weaken our capacity to fulfill navy and critical-industry wants.
As these mills die, we get fewer metal employees, lose provider networks and weaken the economic muscle reminiscence that true nationwide independence requires. Granite Metropolis’s closing is a warning gentle on the dashboard.
The steelworkers union on the Granite Metropolis Works has referred to as for $500 million of the Nippon funding to be utilized to modernizing the Granite Metropolis Works. The U.S. authorities has a golden share on this deal, and it may very well be exercised to make that funding and convey again full manufacturing at Granite Metropolis, however it’s unclear if that can occur.
It’s an issue for Trump. Throughout a rally at a U.S. Metal mill outdoors Pittsburgh in Could, he mentioned of the Nippon deal, “I’m going to be watching over it. There can be no outsourcing and no layoffs in anyway.”
That may’t be mentioned of Granite Metropolis now. With that mill approaching its ultimate days, the Trump administration ought to maintain its powerful stance on present metal tariffs, moderately than offering exemptions and permitting for extra imports if it desires to sign to the {industry} that its investments are sound within the homeland.
Kenneth Rapoza is a senior contributor overlaying China for Forbes since 2011./InsideSources
