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Penn Mutual Asset Management CIO Mark Heppenstall weighs in on President Donald Trumps latest move to impose a 25% tariff on car imports to the U.S.
Steelmaker Cleveland-Cliffs announced this week it will idle one of its production factories and lay off about 600 workers, citing soft demand for steel used in auto manufacturing.
Cleveland-Cliffs said it will idle portions of its plant in Dearborn, Michigan, this summer and lay off roughly 600 employees due to what it said was "the current reality of weak automotive production in the U.S."
The company plans to temporarily idle its blast furnace, basic oxygen furnace steel shop and continuous casting factories in Dearborn. Layoffs would take effect July 15.
"These actions will allow the company to operate more efficiently and in a more cost-competitive way for the current market environment," Cleveland-Cliffs said in a statement. "We believe that once President Trump's policies take full effect and automotive production is re-shored, we should be able to resume steel production at Dearborn."
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Cleveland-Cliffs said the layoffs were due to soft automotive industry demand for steel. (Dustin Franz/Bloomberg via Getty Images / Getty Images)
Cleveland-Cliffs said by mid-July it expects its Cleveland Works C6 blast furnace to be back in full operation after it was idled last year. It added that the Dearborn Works' finish plants, including the pickling tandem cold mill and continuous galvanizing line, will continue to operate and support the continued employment of another 550 workers.Ticker Security Last Change Change % CLF CLEVELAND-CLIFFS INC. 9.33 +0.19 +2.08%
The company's layoffs in Michigan follow Cleveland-Cliffs' announcement that it will lay off 630 employees in Minnesota as it idles its mine in Minorca and idles part of its mining operations in Hibbing. Those layoffs would begin in May.
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A freight train carries steel at the Cleveland-Cliffs Inc. Cleveland Works steel mill in Cleveland. (Luke Sharrett/Bloomberg via Getty Images / Getty Images)
A letter from Robert H. Fischer, a Cleveland-Cliffs human resources and labor relations executive, that was obtained by WDIO ABC explained the company anticipates the layoffs will be temporary.
"We cannot predict their length, which may exceed six months," the letter states.
The letter also cited "decreased domestic steel demand" in 2024 as contributing to the move due to an accumulation of excessive iron ore pellet inventory.
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Cleveland-Cliffs' stock has declined over 13% in the past month but is down just 2.7% year to date. Its share price rose over 2% on the day as of mid-afternoon Thursday.