U.S. Steel vows (nonspecifically) to restore 10,000 jobs

U.S. Steel's MinnTac facility is the largest active iron ore operation in the United States, and "king" of the Iron Range mines of Northern Minnesota. (PHOTO: U.S. Steel)

(PHOTO: U.S. Steel)

In recent days, we’ve been talking about the general improvement of stock and commodity prices as they relate to Mesabi Range iron mines. One of my key observations was that despite the surge, U.S. Steel’s Keewatin Taconite remained closed after 18 months.

Well, stop the presses. Maybe.

On Wednesday, U.S. Steel CEO Mario Longhi said on CNBC that market conditions will allow the company to restore 10,000 jobs.

Ten-thousand is a lot of jobs. And I don’t want to pour cold water on such an optimistic claim, but I just don’t know where U.S. Steel creates those jobs in the modern mining and steelmaking business. The company has shed more than 7,000 jobs since 2007. Reopening steel mills in Illinois and Alabama, which would likely bring KeeTac with it, would generate not quite half of those jobs. Longhi would need to open new mills to get to his 10,000 figure.

Longhi offered no specifics about his plan, of course. It stands to reason that KeeTac would be included in this nebulous claim, however, as it’s the only U.S. Steel iron ore mine to close during last year’s steel slump.

“I have not felt an environment of positive optimism, where forces are converging to provide for better environment, in quite a while,” Longhi told CNBC, according to this Reuters story in the Duluth News Tribune.

It’s true, iron and steel stocks have gone bonkers since Donald Trump’s election one month ago today. And the promise of cutting corporate taxes by more than half surely pleases companies like U.S. Steel. But this is fundamentally a supply and demand equation. Steel companies are so much better at meeting demand with fewer workers than they were even ten years ago. And they’re ten-fold better at it than the last time the Iron Range was considered “economically stable.”

In my experience covering the Iron Range, when you see a very specific claim of jobs created (10,000!) but no specific plan to go with it, you’re actually an unwitting participant in a theater production. I’m betting this is a gambit to get some attention from the new Trump Administration, further boosting U.S. Steel’s stock and loosening up some capital.

In short, I have no idea where U.S. Steel will recreate 10,000 jobs. But if it manages 400 in the fair city of Keewatin I know some people who will be very happy.

UPDATE: Cliff Tobey offered a helpful link, showing that U.S. Steel has already clarified its comments. Longhi was referring to the American steel industry as a whole, not just U.S. Steel. With 16,000 layoffs in 2015-16, it is possible that 10,000 of those jobs will come back. And while it remains possible that KeeTac comes back next year, we go back to waiting to see if U.S. Steel restarts Granite City as our primary indicator.

Comments

  1. Cliff Tobey says:
  2. Karin Schultz says:

    I have to agree with you…in my opinion it is better to keep your mouth shut unless you have specific plans to go along with a statement like that….This was reported on so that people would be duped into thinking that trump has already made things better by supposedly being elected…The CEO was irresponsible in saying what he did without concrete plans behind it…the rich are just going to get richer and the poor poorer…

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