US Steel Layoffs: More Than 700 Workers in Ohio, Texas Could Lose Jobs

U.S. Steel announced layoffs Monday that will affect two pipe plants in Ohio and Texas and potentially terminate more than 700 employees between the two facilities starting in March.

Some 600 workers at U.S. Steel Tubular Operations in Lorain, Ohio, received a layoff notification this week, according to WJW-TV. A letter to the union's Pittsburgh-based president blamed a decline in market demand for tubular steel as the reason for the layoffs.

The Pittsburgh Post-Gazette reported that another 142 workers at the Houston plant face layoffs as well starting in March, according to a letter posted on the website of United Steelworkers Local 1104.

The Wall Street Journal wrote that the plants in Ohio and Texas make steel pipes and tubes for oil and gas exploration and drilling. The newspaper said energy companies, though, have pulled back on drilling exploration with oil prices tumbling to 5-and-a-half-year lows of $50 a barrel at the end of 2014.

The Lorain, Ohio, plant produces more than 700,000 tons of pipe a year while the Houston operation creates another 100,000 tons of pipe annually, The Journal noted.

"What appeared just a few short weeks ago as being a productive year . . . has most abruptly turned sour," Local 1104 President Tom McDermott said in a notice posted on the union's website.

"The International in conjunction with the leadership team of the Local have begun formulating plans to minimize the impact this may have on the membership. We have been allotted 60 days in order to protect the rights of the membership, unlike in the past when layoffs occurred immediately," McDermott's statement continued.

Before the drop in oil prices, steel pipe and tubes had been U.S. Steel's "most reliable profit driver," analyst Sam Dubinsky of Wells Fargo told The Wall Street Journal.

But Mario Longhi, U.S. Steel' chief executive, did warn analysts in October that "the recent turmoil in the crude oil markets could have an impact on the level of drilling activity as we move into the new year."

Related Stories:

• Steel Mill Explosion Rocks Knoxville, Sends 6 To Hospital
• Gas $2 Gallon: States Across Nation Celebrate Six-Month Plunge