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Local officials react to possible plant closure

Jim Panei, president of United Auto Workers Local 3303, wants to make one thing clear amid the talk of the Butler AK Steel plant's potential closure: the date of the takeover by an Ohio-based iron ore company and any potential closing of the plant are not related.

Panei, whose union represents the 1,400 active employees at AK's Butler Works, said although Lourenco Goncalves, chairman and CEO of Cleveland-Cliffs, said the company will absorb AK Steel on March 13, he did not say that's the closing date if the tariff loopholes are not closed.

Goncalves recently testified at a Congressional Steel Caucus hearing that if the loophole in the Trump steel tariff that is causing the Butler plant to be unprofitable is not closed, he “promises” the plant will shut down.

The deal to finalize the sale of AK Steel to Cleveland-Cliffs, an iron ore producer, is slated to take place Friday.

Panei said many people correlated the date with the closing.

“There's a little misunderstanding on that as I see it,” Panei said.

Regarding Goncalves' testimony before the caucus, Panei said he is glad the Cleveland-Cliffs executive took the time to lobby lawmakers regarding the situation.

“I'm encouraged that he is speaking out on our behalf already,” Panei said. “I took it as a positive thing.”

He added that the United States' electric grid is in need of updating, and AK Steel's Butler Works is the only plant in the country that produces electrical steel.

Panei hopes U.S. Reps. Mike Kelly, R-16th, Conor Lamb, D-17th, and other lawmakers will talk about the security issue that could arise if American-made steel is not used in the repairs.

“They need to come out and say that the U.S. should produce the steel for our electrical system,” he said. “I would not want to rely on foreign steel for that.”

Panei said Kelly discussed the Butler plant's situation before the House Ways and Means Committee recently after visiting the plant a few weeks ago, where he was shown the severity of the problem first-hand.

On Friday, Kelly and U.S. Rep. Troy Balderson, R-Ohio, sent a letter to President Donald Trump urging the administration to act to expand 232 tariffs and protect AK Steel.

“We need help right now because foreign countries are subsidizing all their steel and bringing it in cheap and circumventing the tariff system,” Panei said. “Mike Kelly has been tremendous.”

Regarding the rank-and-file employees, he said they have watched business decreasing at the plant recently.

“They're concerned, obviously,” Panei said.

In November, the plant laid off 100 workers mill-wide. The Butler plant had not seen layoffs since the mid-1980s, Panei said.

However, half of those employees were recalled, while others retired and some remain laid off at this time.

He said the union will continue to reach out to anyone who could help to keep the plant open.

“It's very serious not only for this community, but for the United States because of the (electrical) grid problem,” he said.

But Panei said he doesn't believe the Butler plant will close.

“I've got confidence that it's all going to work out,” Panei said.

A few of the employees heading for the parking lot after the daylight shift commented on the rumors swirling throughout the plant.

Kevin Holt, who will retire from AK Steel in September, said he thinks Goncalves' “promise” to close the plant was a threat and a waste of time.

“I don't think it's going to get far in closing the loophole,” Holt said.

He also agreed that should a shutdown happen, it won't be anytime soon.

“They're not going to close down a week after they take over,” Holt said.

Another worker who asked to remain anonymous argued that if Cleveland-Cliffs plans to close the Butler Works, the Ohio-based company would not have recalled half the workers laid off in November.

Leslie Osche, chairwoman of the county commissioners, said she and the other two commissioners will encourage the Trump administration to make the necessary moves to prevent other countries from circumventing the trade tariffs.

She said the impact on Butler County if the longtime steel mill closed would be huge, given the annual employee earnings of $111 million at the Butler plant.

“Those earnings generate income tax and state income tax,” Osche said. “The impact of that alone would be devastating, I would say.”

She said 200 trucks roll in and out of AK's gates every day at the Butler plant, and those workers, as well as contractors, would be affected.

“It's pretty significant, so we're grateful that the CEO of Cleveland-Cliffs is (in Washington D.C.) advocating in this way,” Osche said. “I think he has to send a clear message.”

Osche said she trusts President Donald Trump and his dedication to American workers.

“I have confidence in the administration, but we are working right now to make sure everyone understands the full impact of what would happen if this plant closed,” she said.

Osche added that the race for the White House could have a positive impact in adding AK's components to the list of items covered by Trump's tariffs.

“The timing is appropriate,” Osche said. “It's 2020, and Pennsylvania is certainly an important state for the Trump (campaign). I think there's an implication there.”

She agrees with Panei regarding American steel being used for the country's electrical grid.

“It is critical to national security when you think about the electric grid and what they're producing with that electrical steel,” Osche said. “We'll continue to support whatever efforts that Cleveland-Cliffs is making to ensure we can keep AK Steel here.”

Osche's husband, Jim, has been employed at AK Steel in Butler for 33 years.

Joe Saeler, executive director of the Community Development Corporation of Butler County, called the prospect of shuttering AK Steel's Butler Works “very scary.”

“It would be detrimental,” Saeler said. “We want to be able to work with the feds to hammer this out.”

The county commissioners are taking the lead in making appeals to government officials, Saeler said. He added that as CDC director, he will do whatever is necessary or asked of him by the commissioners to prevent the loss of 1,400 jobs in Butler County.

“It's definitely a terrible subject,” Saeler said. “We have to work hard to make sure this loophole is closed.”

A father and son duo leaving the plant on Friday afternoon worked 32 years and two years at AK, respectively.

Neither were willing to give their names to the Eagle, but the younger man said the atmosphere at work is split about 50-50, with half being extremely concerned for their jobs and the other half optimistic.

He reported some in the plant claim Cleveland-Cliffs is looking for an excuse to close down the Butler works because the plant does not have a blast furnace, which is necessary to make iron-ore pellets.

His father said workers are talking about the situation, and most are aware that the loophole in the Trump tariffs is causing the problem.

“People are worried about their jobs,” he said.

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