Steel mill abruptly closes shop, lays off 376 workers; governor says tariff issue a key factor
Published 5:08 pm Tuesday, October 1, 2019
A Louisiana steel mill unexpectedly said it is laying off 376 employees and shutting down its factory as the governor suggested tariffs may have played a role in the closure.
Workers at Bayou Steel Group in LaPlace were shocked when the factory announced Monday the layoffs and shutdown. The factory is St. John the Baptist Parish’s largest employer.
In a letter to the parish and the Louisiana Workforce Commission, the company said “unforeseen circumstances and the inability to secure necessary capital” was forcing the closure. The company said the facility would close by the end of November. Layoffs started Monday and will continue until the plant is closed, the company said.
“I was at home, and they called me, said I don’t have a job. And that’s all I know,” said Charles Alexander, a worker who was laid off.
The company says on its website that it uses scrap metal from items like old cars or barges to create steel products such as beams or other goods used in manufacturing and construction.
In a statement Tuesday, Bayou Steel Group said it was filing for Chapter 11 bankruptcy protection.
“This unfortunate situation was created by a severe lack in liquidity at the Company, which resulted in a default with its senior secured lender, and created a situation where the Company could no longer purchase raw materials,” the statement read.
The company said it would try to sell its remaining assets to a buyer who would “hopefully re-start operations.”
In a news release, Gov. John Bel Edwards said the company uses recycled scrap metal that is “largely imported.”
“While Bayou Steel has not given any specific reason for the closure, we know that this company, which uses recycled scrap metal that is largely imported, is particularly vulnerable to tariffs,” the governor said. “Louisiana is among the most dependent states on tariffed metals, which is why we continue to be hopeful for a speedy resolution to the uncertainty of the future of tariffs.”
Last year, the governor wrote to President Donald Trump about his concerns that tariffs might hurt Louisiana’s ports, liquefied natural gas facilities, agriculture producers and other industries.
Trump dusted off a little-used provision of U.S. trade law that lets him impose tariffs on imports he declares a threat to national security. Using that authority, he last year imposed 25% taxes on foreign steel, although he has exempted imports from some countries. The tariffs ostensibly help U.S. steel producers but raise costs for American companies that buy imported steel and steel products.
Parish President Natalie Robottom told news outlets that the parish will work with the Louisiana Workforce Commission to help the workers find new jobs.
Representatives from the commission were in LaPlace on Tuesday to help workers who had been laid off.
“Right now we’re just doing what we can to help them get resumes, unemployment going,” said Celeste Hayes, from the commission.
The commission said in a news release that it would petition the U.S. Department of Labor on behalf of Bayou Steel so that affected workers can receive benefits under a federal program to assist American workers who have lost jobs as a result of foreign trade.
Under the Trade Adjustment Assistance Program, workers can receive benefits like career counseling, training and money for their job search, the commission said.