US Steel to end steel production at Illinois plant but no layoffs

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HARRISBURG, Pa. (AP) — U.S. Steel will stop processing steel slabs at its Granite City Works plant in Illinois, three months after Nippon Steel sealed a deal with President Donald Trump to buy the iconic American steelmaker by giving the government a say over decisions that affect domestic steel production.

U.S. Steel will end production at the plant, likely in November, but it won’t lay off any of the roughly 800 workers there or reduce their pay, it said. Workers will maintain the plant so that it is operational in case anything changes, U.S. Steel said.

They’ll keep their jobs at least until 2027, as a result of a national security agreement between Trump and Nippon Steel that allowed its buyout of U.S. Steel to go forward.

In a statement, the Pittsburgh steelmaker said Tuesday that it will “optimize” its operations by focusing on processing raw steel at its Mon Valley Works facilities in Pennsylvania and Gary Works in Indiana.

Granite City Works makes rolls of sheet steel for the construction, container, pipe and automotive industries.

The plant is located in southern Illinois, just outside St. Louis. However, in 2023, U.S. Steel stopped producing raw steel there when it idled the last operating blast furnace at Granite City. It idled the other blast furnace there in 2019.

The United Steelworkers union local in Granite City told its members in a memo that U.S. Steel is developing a severance package, but that U.S. Steel told it there would be no layoffs because of the decision.

In a statement, the United Steelworkers district director in Illinois, Mike Millsap, said it had yet to receive anything in writing from U.S. Steel about its plan for Granite City Works.

“As we continue to push U.S. Steel for details on how this impacts our members, we intend to hold Nippon accountable to the promises it made over the past year and a half to secure its deal,” Millsap said.

Nippon Steel in June finalized its nearly $15 billion takeover of U.S. Steel, ending a long and politically fraught process a year-and-a-half after the Japanese company first proposed the buyout.

The pursuit by Nippon Steel for the Pittsburgh-based company was buffeted by national security concerns and presidential politics in a premier battleground state, dragging out the transaction for more than a year after U.S. Steel shareholders approved it. The national steelworkers union opposed it, although officials some union locals supported it.

In the end, Trump changed his stance on invoking national security grounds to block it.

To sweeten the deal, Nippon Steel upped its guarantees of investment into U.S. Steel facilities and added a so-called “golden share” provision that gives the federal government the power to appoint a board member and a say in company decisions that affect domestic steel production and competition with overseas producers.

The protections last until 2035 for U.S. Steel facilities, except for Granite City. Those protections last until 2027.

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Follow Marc Levy on X at: https://x.com/timelywriter