Strange clouds hovered over Hibbing recently. From a distance, they looked like smoke or haze, but the phenomenon was actually dust blown off the dumps and tailings dams of Hibbing Taconite. Normally, mitigation prevents this from happening. But it was too cold to water anything and there was no snow to suppress the dust like usual.
Technology masks the fact that we live next to some massive mines on the Iron Range, but moments like this are good reminders.
So is the fact that, at this hour, stockholders and CEOs grapple with the fate of the American steel industry, including the jobs of many people we know. No one working in the pits or plants of Iron Range mines knows exactly what the big shots will do. That, too, is a hallmark of mining.
On Dec. 1, the board of directors of U.S. Steel collected final bids for the company, which essentially put itself up for sale late last summer. Several outcomes remain possible. The company could be sold outright or broken into pieces. Corporate big wigs have been snooping through local taconite plants like mom’s new boyfriend in the refrigerator on Sunday morning.
The move will benefit stockholders, but represents an ignoble end to the company that defined the role of an American corporation in the 20th Century. The impact on workers at U.S. Steel properties like Minntac or Keewatin Taconite here on the Mesabi remains equally uncertain.
One bad omen comes from U.S. Steel’s decision to indefinitely idle their blast furnace at Granite City, Illinois. More than 1,000 Steelworkers received notice that they’ll be laid off early in the new year. The move will cool another American blast furnace, the primary consumer of traditional taconite pellets.
Though the company’s precise strategy remains locked in a proprietary mystery box, some general observations inform the situation.
Domestically, the United Auto Workers just settled contract agreements with the Big Three automakers, including Ford, General Motors and Stellantis, the owner of FiatChrysler. It was a landmark 21st century victory for a legacy union facing modern challenges like new technology and a less unionized workforce. The UAW and the United Steelworkers together remain the twin fists of the old Congress of Industrial Organization, each just less than a million members strong.
These unions have a case that their workers deserve better. Both cars specifically and steel generally fetch unusually high prices right now. The dirty secret behind this and most other inflation is that it’s more related to corporate profit grabs than actual costs. But, on the ledger, car companies worry about the price of steel and steel companies worry that car companies might reduce their orders. The contract settlement accelerated these industrial anxieties.
Last month, Cleveland-Cliffs raised the price of flat-rolled steel to $1,000 a ton, a record for automotive-grade steel. U.S. Steel has also raised prices, even as they idle Granite City. Stock analysts tell the truth: the domestic market looks very strong in 2024.
About that. With bidders circling the elder corporation like hungry turkey buzzards, we must consider whether the job losses are related to weakness in what is otherwise a very strong market, or whether the company seeks to juice its stock price and net income just prior to a sale. Personally, I’d bet on the latter, but that’s only a historian’s perspective.
We are witnessing historic changes in the corporate structure and technology of steelmaking. We should prepare to absorb those changes, some of which represent great opportunities and others that will hurt.
Sometimes clouds on the horizon portend terrible fires or powerful storms. Sometimes they are dust in the wind, subtly and slowly changing everything with time.
Aaron J. Brown is an author and college instructor from northern Minnesota’s Iron Range. He writes the blog MinnesotaBrown.com and co-hosts the podcast “Power in the Wilderness” on Northern Community Radio. This piece first appeared in the Saturday, Dec. 9, 2023 edition of the Mesabi Tribune.
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