U.S. Steel may cut nearly 700 Texas jobs

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The oil crash continues to hit parts of rural Texas hard. On Wednesday, the Texas Workforce Commission released a letter from U.S. Steel Corp. announcing the elimination of nearly 700 jobs near the small city of Lone Star near the Louisiana and Arkansas borders.

U.S. Steel is considering temporarily mothballing the pipe-making plant during the ongoing oil and gas slump. The facility is located in northeastern Texas in Morris County, which has a population of less than 13,000 people. Lone Star has just 1,500 residents.

While the Houston area seen thousands of jobs lost in the crash, the oil downturn has hit small towns even harder, with a much bigger share of those communities feeling the impact of mass layoffs. U.S. Steel is the largest private employer in Morris County, said Lone Star Mayor Karl Stoermer. The company previously cut jobs at the plant in 2015.

“We hope it’s something short of shuttering the whole plant,” Stoermer said. “That would have a very big impact on not just the town, but the whole region.”

U.S. Steel is headquartered in Pittsburgh, but its U.S. Steel Tubular Products subsidiary is Houston based. The company’s new filing with the Texas Workforce said it will cut up to 679 jobs near Lone Star beginning March 13 and continuing through May.

In an email, U.S. Steel spokeswoman Sarah Cassella emphasized that that cuts are intended to be temporary and not a permanent shutdown. The company declined interview requests Wednesday.

“This potential action is part of an ongoing adjustment to operations due to challenging market conditions, including fluctuating oil prices, reduced rig counts, depressed steel prices and unfairly traded imports,” Cassella stated. “All of these factors continue to reduce demand for tubular goods.”

All of the potential cuts would mean eliminating virtually all of U.S. Steel’s workers at the Lone Star plant, Stoermer said.

“I don’t even see a maintenance force to keep it maintained,” he said.

The ripple effect from cuts at U.S. Steel will hurt trucking companies, pipeline inspectors and coating businesses in the region, Stoermer said. The impact from the oil crash has already been felt at most of the county’s retail stores as well, he said.

“We’ve gone through cycles like this before,” Stoermer said. “Hopefully, we will recover.”

The timing coincides with Wal-Mart closing two neighborhood market or express stores within the county, as well as two more Wal-Marts just outside of Morris County.

“Putting these two (U.S. Steel and Wal-Mart) together will have a very significant impact on the economy,” he said.

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