Cleveland-Cliffs lays off 600 workers amid weak auto demand

In the United States, Cleveland-Cliffs has recently decided to lay off about 600 employees at its Dearborn Works, resulting from decreased demand for automotive steel. On July 15, 2024, the layoffs will take effect as the company reacts to reduced automotive production in the country that has adversely impacted the steel industry. The company's decision includes idling key sections of its plant, specifically the blast furnace, basic oxygen furnace steel shop, and continuous casting sectors in Dearborn. Cleveland-Cliffs cited the 'current reality of weak automotive production in the U.S.' as a key reason for its move. In addition to the layoffs in Michigan, Cleveland-Cliffs also announced job cuts in Minnesota, where the company plans to lay off 630 employees as it idles operations at its mine in Minorca and part of its mining operations in Hibbing. These layoffs are set to commence in May 2024. The executive letter mentioned that while the layoffs may be temporary, their duration could extend beyond six months due to ongoing challenges in domestic steel demand. Cleveland-Cliffs has expressed hope that the situation may improve once policies from the Trump administration take full effect and as automotive production potentially returns to the U.S., leading them to resume steel production at their Dearborn facility. While many operations will be idled, the Dearborn Works' finishing plants, including the pickling tandem cold mill and continuous galvanizing line, will remain operational, ensuring continued employment for around 550 workers. The company aims to streamline its operations under the current market conditions to enhance efficiency and competitiveness. Cleveland-Cliffs has been facing challenges with a serious decline in the demand for steel, leading to actions to reduce their workforce and idle operations. The company has reported a decline in stock prices and noted an accumulation of excessive iron ore pellet inventory, indicating underlying issues in their operational stability. The layoffs and idling of operations reflect a broader trend in the automotive sector, where steel demand has been significantly compromised, and the overall economic conditions have contributed to this difficult decision.