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Over 1,500 Layoffs Coming To U.S. Steel Plant Near Detroit

AILSA CHANG, HOST:

The Trump administration is expanding its 25% tariff on imported steel to cover additional items like staples and electrical wiring. But economists at the Federal Reserve say the initial steel tariffs actually backfired, increasing costs and forcing job cuts. The latest job cuts come from U.S. Steel, which will soon lay off more than 1,500 workers at its massive facility near Detroit. From member station WDET in Detroit, Quinn Klinefelter reports.

QUINN KLINEFELTER, BYLINE: U.S. Steel's Great Lakes Works facility in suburban Detroit is so big it covers portions of two small towns, Ecorse and River Rouge. It makes virgin and coated steel for the Motor City's auto industry, but that is changing.

UNIDENTIFIED PERSON: They'd be - better be looking for jobs. That's all I can say.

KLINEFELTER: In the Hurry Back Bar, set at the end of a main access road to the facility, retired steelworker Terry Powel says she has friends and family who will be laid off.

TERRY POWEL: Bad, bad - they're in panic mode. It's going to affect everybody - the outside contractors, the 18-wheelers, the restaurants. And then they made the announcement a week before Christmas.

KLINEFELTER: Analysts say the job cuts are coming, in part, because U.S. Steel failed to keep pace with its competitors and move to less costly ways of making metal. U.S. Steel says that it wants the capacity to use both the new method and blast furnaces. And it says it is not closing the plant, only temporarily idling it.

MICHAEL BOWDLER: And the most important word right now is idle - idle. And there's some hope still in that.

KLINEFELTER: Michael Bowdler is the mayor of River Rouge, a former steelworker who was laid off from the plant in 1981. He says the town's budget will take a heavy hit when the latest layoffs begin in April. But he understands U.S. Steel's predicament.

BOWDLER: The demand for steel is not there right now.

KLINEFELTER: And here is why. Across the country, steel companies restarted production at their idled plants after President Trump imposed 25% tariffs on imported steel. At the same time, manufacturers started stocking up, fearing an all-out trade war. But lots of new steel was still being produced, and companies were stuck with inventories they couldn't sell.

River Rouge Mayor Michael Bowdler still thinks tariffs are a good idea.

BOWDLER: You know, if there wasn't something done under the current administration, this plant probably would've been closed up a year or two ago. And I am a Democrat, but I have to give credit that - you have to limit that imported steel coming into the United States.

KLINEFELTER: President Trump says the steel industry in the U.S. was dying until he imposed tariffs. Now he says it's thriving. But consider this stark contrast - the price of hot-rolled coil steel, which jumped nearly 50% to more than $900 a ton after the tariffs were imposed, has now sunk by more than 40%. Meanwhile, the price of U.S. Steel stock has tumbled by more than 70%, forcing job cuts like those here. Yet even with that economic dagger, some who live near the plant say they'd be happy to see it shut down altogether.

A hazy sky covers heavy trucks passing near the U.S. Steel plant in River Rouge. This is one of the most polluted zip codes in the nation.

Sandra Turner-Handy is with the nonprofit Michigan Environmental Council. She notes that U.S. Steel has paid millions in fines over the past few years without admitting any wrongdoing for alleged violations, including belching smoke from its facility here that coats cars and homes in grime.

SANDRA TURNER-HANDY: U.S. Steel is known for particulate matter because people are living with this. If you wake up in the morning and you have this gray coating on your car, imagine what you're breathing in.

KLINEFELTER: But the economic disruption here will be significant, and Michigan's congressional delegation is trying to ease the blow. It's calling on the Labor Department to grant those facing layoffs federal benefits designed to help workers who lose employment because of U.S. trade policies.

For NPR News, I'm Quinn Klinefelter in Detroit.

(SOUNDBITE OF BALMORHEA'S "SKY COULD UNDRESS") Transcript provided by NPR, Copyright NPR.