Not 60 days ago did my colleague Stuart post a story entitled: Canadian Steel Hurting in Preference to US Plants when MetalMiner received 20 comments from (in some cases) outraged employees and others. At issue ” the closure of Canadian plants in deference to keeping US plants operating. Many comments from readers suggested that some of the closures made little sense strategically because the Lake Erie plant in particular had operated so profitably. Some had suggested it made more sense to shut down US plants instead.
And yet late yesterday afternoon, US Steel announced it would call back furloughed workers at its Hamilton, Ontario facility to resume output of coke. According to a Bloomberg article, 175 employees will go back to work now and 600 would come back this summer. In addition, a blast furnace in Illinois will bring back an additional 100 employees. Has demand increased enough to warrant the re-opening of these mills?
Many don’t think so and have offered up an alternative theory to the re-hiring. According to this article, workers say they’re glad for the callback, but some think employees are only returning so the company can avoid shelling out at least $15 million in severance pay. The article mentions an employee who had been with the plant for 30 years who would be returning to work after 17 previous layoffs.
Is demand up or is this a case of cost avoidance?