Friday, October 31, 2008

Steel layoffs

Cleveland's largest steel plant, and the most efficient steel plant in the world, will undergo voluntary layoffs, but it doesn't seem to be cause for huge concern so far.

Those of us who have lived in Cleveland have heard this kind of news plenty over the past few decades. Plant layoffs used to be commonplace. But, as we told in our June 2008 story Men of Steel, that kind of feast and famine was supposed to be the old way of doing things.

Granted, as you can see below by the Morning Star tracking of the parent company's share price, our story came out just before a massive crashing of the share price which has fallen some 72 percent since our story was published.

And global demand for steel is weakening due to the global financial meltdown (which technically is not a recession -- at least until the fourth quarter GDP numbers are released in January). A Reuters analysis piece published here says that steel demand could be suffering until next summer.

The Cleveland plant has idled its blast furnaces, but the layoffs so far are all voluntary. Don Whipkey, who was prominently featured in our story, says 11 workers were hired last week. Management is telling the union they should restart by late January or early February.

"There's no sense of panic. Actually, guys are looking for time off," he says.

The plant is increasing training for employees and keeping folks busy, just like they said they would, he says.

So nobody is overly frightened about the future of steel in Cleveland, Whipkey says. Not that it's easy to scare a steelworker: "We've been through it all."

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