Dive Brief:
- Steelmaker Wheatland Tube Co. will close a Chicago plant and lay off 237 workers due to increased competition from Mexico, the company announced last week.
- The nearly 150-year-old steel manufacturer said employees will have the option of transferring to other facilities within its parent company Zekelman Industries’ network or be offered broad transition support like severance and outplacement services.
- The layoffs will occur on a rolling basis beginning in November and could run into 2025, the company said in an email to Manufacturing Dive.
Dive Insight:
Zekelman Industries said the Chicago closure was largely due to the surge in volume of imported steel conduit from Mexico. Imports have jumped 650% compared with before the United States-Mexico-Canada Agreement of 2018, the company said.
In 2018, former President Donald Trump imposed a 25% tariff on steel imports, but granted an exemption to Canada and Mexico the following year. Since then, companies such as Zekelman have criticized officials for not enforcing tariffs on Mexico steel imports.
U.S. steel imports from Mexico climbed to a high of roughly 4.8 million tons in 2022, up nearly double compared to 2015 levels, according to the International Trade Administration.
Mexico-based steel conduit producers and importers have been misclassifying their imported steel conduit to avoid the control system, leading to surging steel volumes in recent years, Zekelman stated in its announcement.
“All we ask is for our trade agreements to be enforced,” Barry Zekelman, executive chairman and CEO of Zekelman Industries said in a statement. “Instead, there will be Americans out of work at a company that pays life sustaining wages and benefits. How does this help promote the American dream?”
On June 11, U.S. steel producers and organizations, including Zekelman, Atkore and Optimus Steel, sent a letter to President Biden urging the administration to take immediate action to address Mexico’s ongoing violation of the 2019 joint steel agreement.
The Biden administration has begun some work to stop the evasion of tariffs — on July 10 it reimposed a 25% Section 232 steel tariff on all products melted and poured or smelted and cast outside of Mexico and Canada. The move aimed to curtail imports routed through Mexico that use steel or aluminum from China and enter the country duty-free.
Zekelman Industries continues to be outspoken about the unfair trade practices as well. On Sept. 12, the company launched a marketing campaign called “Demand Domestic,” to bring awareness to what it says is the need to further onshore steel production.
“As pressure escalates on electrical contractors to deliver on time with exceptional quality, taking a chance on imports risks longer lead times, limited offerings, and real quality concerns adding to higher cost, contractor frustration, and customer dissatisfaction,” Jim Hays, president of electrical at Zekelman Industries, said in the campaign press release.
Besides the closing Chicago plant, Wheatland Tube Co. has five other steel factories in the U.S. — Wheatland, Pennsylvania; Rochelle, Illinois, Warren, Ohio; Birmingham, Alabama; and Kansas City, Missouri, according to its website.
