Lakshmi Mittal's US steel plant to lay off 400 workers
ArcelorMittal SA plans to idle a plant in East Chicago and lay off about 400 workers due to global economic crisis that has dampened demand for the metal.business Updated: Apr 15, 2009 11:07 IST
ArcelorMittal SA, the world's largest steel maker led by India-born steel czar Lakshmi Niwas Mittal, plans to idle a plant in East Chicago and lay off about 400 workers due to global economic crisis that has dampened demand for the metal.
The Luxembourg-based company that produces 10 percent of the world's steel will suspend operations indefinitely at the Indiana Harbour Long Carbon facility, the Chicago Tribune reported Tuesday citing a company statement.
The plant, which makes structural steel used in buildings, bridges and railroad tracks, is part of a larger facility that employs about 5,000 union workers and hundreds of nonunion workers. The layoffs of union and management workers are expected to begin in about 60 days.
The larger Indiana Harbour works is the biggest steelmaking complex in North America with several other facilities, including blast furnaces and mills that will not be affected. Its origins date to 1901, when Inland Steel opened the operation, according to the company.
"The global economic downturn has caused a reduction in the demand for the company's products," ArcelorMittal said in a statement. "This indefinite closure and corresponding layoffs reflect measures the company is being forced to take around the world to adapt to the market's situation."
Jim Robinson, director of United Steel Workers District 7, said the union had been notified of the layoffs and that about 400 workers would be affected. An electric furnace and 12-inch bar mill will be idled, he said.
"Obviously, this is not a good situation," he said. "Just another unfortunate reason we need to take every possible action to get this economy back up and running."
As of Dec 31, ArcelorMittal employed 315,867 people, with about 12 percent of them in North America.
ArcelorMittal recorded a $2.6 billion loss on $22.1 billion in revenue in the fourth quarter of 2008, compared with a $2.4 billion profit on $28 billion in revenue in the fourth quarter of 2007.
US-traded shares of ArcelorMittal fell $1.01, or 3.7 percent, to $26.21 in afternoon trading Tuesday.
Other steel companies have taken similar steps to cut production and lower costs during the recession. United States Steel Corp., the largest US-based steel company, has laid off thousands of workers since late last year, when demand and prices for steel plummeted.
First Published: Apr 15, 2009 11:05 IST