Executive Summary
- US Steel will cease steel production at its Granite City, Illinois, mill by the end of October, shifting slab production to other facilities.
- The Granite City facility’s 800 employees will retain their jobs and pay until at least June 2027, as part of a deal negotiated with President Trump for the Nippon Steel acquisition.
- These job protections are time-limited, expiring in June 2027, after which the future employment status of the Granite City workforce is uncertain.
The Story So Far
- The decision by US Steel to cease steel production at its Granite City mill, while retaining its workforce, is a direct consequence of the acquisition deal allowing Japanese steelmaker Nippon Steel to buy US Steel. This agreement was negotiated with President Donald Trump and included specific, time-limited job protections and production guarantees for the workers, aiming to prevent layoffs and plant closure until at least June 2027, despite US Steel’s strategic desire to optimize its operational footprint and concentrate production elsewhere.
Why This Matters
- The cessation of steel production at US Steel’s Granite City mill, despite retaining 800 jobs until at least 2027 due to a deal negotiated with President Donald Trump, signals a strategic shift in the company’s operational footprint and introduces significant long-term uncertainty for the facility and its workforce beyond the time-limited job protections.
Who Thinks What?
- US Steel plans to cease steel production at its Granite City mill to optimize its operational footprint but will retain all 800 employees at their current pay until at least 2027, maintaining the plant in an operational state, honoring a deal negotiated during the acquisition by Nippon Steel.
- President Donald Trump championed the Nippon Steel acquisition, asserting that the deal improved for workers and promised “no outsourcing and no layoffs whatsoever,” taking credit for the job protections secured in the agreement.
- The United Steelworkers (USW) union strongly objected to the Nippon Steel acquisition, expressing skepticism about “binding commitments” and criticizing Nippon Steel as a “bad actor” that has repeatedly violated trade laws.
US Steel plans to cease steel production at its Granite City, Illinois, mill by the end of October, but the facility’s 800 employees will retain their jobs, maintaining equipment, until at least 2027. This arrangement stems from a deal negotiated with President Donald Trump, which included job protections and production guarantees, to permit the acquisition of US Steel by Japanese steelmaker Nippon Steel.
The company stated its intention to optimize its operational footprint by concentrating steel slab production and processing at its Mon Valley Works in Pennsylvania and Gary Works in Indiana. This strategic shift will lead to a reduction in slab consumption at the Granite City Works. Despite the change in production, US Steel confirmed it would not lay off any Granite City employees nor adjust their pay rates.
US Steel clarified that the plant will not be idled but will remain in an operational state. Ancillary operations will continue, and the facility will be “maintained by employees so production could resume quickly if the situation changes.”
President Trump had previously championed the Nippon Steel deal and new 50% tariffs on steel imports, asserting at a May rally near Pittsburgh that these measures would benefit US Steel workers. He commented that the deal “got better and better and better for the workers,” promising to oversee it to ensure “no outsourcing and no layoffs whatsoever.”
However, the job protections secured in the agreement are time-limited, preventing the closure of Granite City and worker layoffs only until June 2027.
Neither the White House nor the United Steelworkers (USW) union offered immediate comments on the announced production halt. While local USW chapters in Pennsylvania expressed support for the Nippon Steel acquisition, the broader USW organization voiced strong objections to the deal. The union previously stated that “binding commitments are hard” and criticized Nippon Steel as a “bad actor” that has “again and again violated our trade laws.”
The Granite City plant currently employs approximately 700 hourly workers, represented by the USW, and about 100 salaried staff. This figure represents a significant reduction from its peak employment of 2,000 hourly workers. The mill’s first blast furnace was shut down in 2019, followed by its remaining furnace in 2023, after which the facility primarily processed slabs from other mills.
The decision to halt production at Granite City underscores the complex balance between corporate operational strategies and political commitments to job security, with a critical deadline for worker protections looming in mid-2027.
