A depressed steel market forced Geneva Steel to lay off 130 workers over the weekend.
"We've been having a difficult time keeping our order book full," said Ken Johnsen, executive vice president.Geneva blames an influx of low-priced steel from Asia and Russia for decreasing demand for its steel plate and coil. The company, along with other U.S. steelmakers, intends to file an "anti-dumping" petition with the U.S. International Trade Commission, a tactic Geneva used last year to curtail what it believes are illegal imports. The U.S. Department of Commerce limited imports from China, Russia, Ukraine and South Africa last December.
"It did a lot of good for a while," Johnsen said.
Dumping complaints take at least a year to resolve, although relief can come as early as 70 days after a petition is filed, Johnsen said. "That takes time. We'll do what we can do in the meantime," he said. Johnsen didn't give a date for when Geneva might approach the commerce department for a hearing.
The latest round of layoffs - Geneva's fourth in 18 months - differs from previous job cuts. The company will monitor the steel market daily so those workers can be called back as soon as conditions improve, Johnsen said. In addition to those furloughed, other employees were placed on reduced work weeks.
United Steel Workers of America Local No. 2701 was not surprised by the layoffs and is taking it in stride.
"We could see it coming," said Kelly Hansen, union financial secretary. "The steel industry sees times like this. It's up and down. This will pass."
The union also agrees with management's reasons for the furloughs.
"We're just waiting for some orders and we hope we can correct the imports which is the root of the problem," he said.
Geneva intends to permanently trim at least 500 employees from its work force by the end of the year as part of an ongoing restructuring effort to become more competitive. The cuts will save about $25 million, Johnsen said. Job reductions have been across the board, affecting administrators, nonunion plant managers and rank-and-file union steelworkers.
More than 230 workers recently accepted early retirement and voluntary resignation packages.
Steel mills nationwide are suffering from poor fiscal performances. Earnings were down for 16 major mills, especially integrated mills like Geneva, over this time last year, according to Locker Associates, a New York firm that tracks the industry.
Geneva also is hurting on Wall Street. Its stock is selling for less than $1.50 per share. Its one-year high is slightly more than $4 a share. Almost all steel companies are trading at five-year lows, Johnsen said.