Superior Graphite, a manufacturer of electrodes for the steel industry, is shedding 42 of its 70 jobs in Russellville, and may cut the remaining jobs when existing orders are completed.
Officials with the Chicago-based company said they were temporarily idling production, not shutting down the facility, in order to deal with unfavorable market conditions. Dave Francis, director of human resources for Chicago-based Superior Graphite, outlined several factors leading to the downsizing in the following memo.
“As of Tuesday, April 5th, Superior Graphite Co. has made the difficult decision to begin temporarily idling production at our Russellville, Arkansas plant.
“There are several factors that played into this decision and they are: the continued importing of low cost electrode and specialty graphite products; the continued depressed rates of steel production, and low capacity utilization have created an environment such that we cannot effectively compete in these markets with these conditions. Despite the significant efforts by many people, and continued investment allocated by the Board of Directors, we have been unable to achieve the necessary turnaround to stem the financial losses, or gain market share.
“We plan to continue production long enough to fulfill necessary orders, and to finish product that is currently in process to prepare it for sale. This process calls for a significant initial reduction in staffing needs, and affected employees have been offered transition benefits. We will keep the existing production equipment in-place, and the site will be well-maintained. When, and if, market conditions allow, we will make a determination whether to re-start operations.”
The statement also added that Superior customers would be contacted about their orders. The company also operates a sales office and customer service center in Russellville. There was no word from the company on future employment in those areas.
As of February, there were an estimated 28,411 jobs in Pope County, with 1,520 people unemployed. The loss of the 70 jobs would be 0.24% of the number of jobs in the county.
Founded in 1917, Superior Graphite is an international graphite manufacturer specializing in high temperature technologies, advanced sizing, blending, and coating technologies. The company also has graphic sector manufacturing sites in Bedford Park, Ill.; Chicago; Hopkinsville, Ky.; and Sundsvall, Sweden.
STEEL INDUSTRY WOES
According to the American Iron and Steel Institute, the industry is “being threatened” by steel dumping by other countries and too much global steel making capacity.
While the American steel industry is highly competitive, utilizing state-of-the art equipment and investing in new technologies, in 2014 and into 2015 the industry experienced a significant financial downturn and was completely decoupled from the modest growth occurring in the rest of the economy. This was a result of the continuing surge in dumped and subsidized imports coming into the U.S. market from around the world,” noted the Institute’s 2016 industry profile.
According to the profile, steel imports rose 36% in 2014 and captured a record 28% of the U.S. market. In 2015, steel imports had 29% of the U.S. market, which was a new record.
“A major cause of the steel import surge was global steel industry overcapacity, especially in China. The Organization for Economic Cooperation and Development (OECD) estimates that there is almost 700 million metric tons of excess steel capacity globally today, with almost half of that coming from China,” noted the report.
AISI said the U.S. steel industry directly employs about 142,000 people, and directly or indirectly supports almost 1 million U.S. jobs.