Liberty Steel to cut production at Peoria plant and furlough workers

PEORIA – The Liberty Steel and Wire plant will temporarily reduce production and furlough employees, the Journal Star has learned.

The company is reducing production at its melt shop facility and rod mill, along with reduction at its wire mill, all located at a giant complex off Adams Street.

Liberty Steel said in a statement to the Journal Star on Wednesday that "severe challenges" in the steel industry, including an "influx in low price imports," are what led to the decision to furlough employees.

"As a result, LIBERTY Steel has made the difficult decision to temporarily reduce production at its Peoria’s melt shop production facility and rod mill," Liberty Steel said in a statement sent to employees. "We also had to make a difficult decision to minimize production in our wire mill as well. This is temporary and the organization plans to restart the facilities in late October. LIBERTY is still in the position of being able to fulfill existing orders and we plan to use this downtime to focus on process improvements."

Liberty Steel, formerly Keystone Steel & Wire, said it is still working on the "scope of the impact to employees" but characterized the moves as temporary. The company did not specify the number of affected employees.

"With the influx of low-priced imports, it makes it challenging for us," said Penny Wight, president of the Independent Steelworkers Alliance, the union representing 610 workers at the plant. "The orders are down. They can buy it cheaper, (so) we have to temporarily reduce production."

The union told the Journal Star 60% of employees will be furloughed. Wight said she was confident that the production slowdown would only be a temporary measure to help reorganize operations at the plant, which came under Liberty's umbrella in 2018. She noted that the plant would be able to fulfill existing orders in the meantime.

"We're still able to get what orders we have out," Wight said. "Hopefully, it's only going to be for a few weeks, then things will pick back up (and) we'll be back to normal."

The union rejected a contract offer from the company last week, Wight told the Journal Star. Instead of walking off the job, she said that both sides were working on an extension of their current contract and were still negotiating in good faith.

"I'm 100% confident (in obtaining a fair contract)," Wight said.

Wight said potential future increases in orders could help bring the affected employees back.

"We'll be laid off until orders pick up and we start producing again," Wight said. "We'll still have some employees working, mainly the production lines. We'll still have maintenance employees here."

The union plans to provide assistance with filing for unemployment through access to computers at its facility. The hope is that production can resume at the facilities in late October.

Chris Setti, the CEO of the Greater Peoria Economic Development Council, said in a statement he was also hopeful the furloughs were short-lived.

"It's always difficult to hear news like this because we know it impacts the lives of workers and their families, if only temporarily. Economic conditions are always fluctuating and I understand the need to scale production to meet demand," Setti said. "I'm hopeful that the furloughs are indeed temporary. Liberty Steel is an important business and employer in Greater Peoria and we will work to support them and their employees however we can."

Meanwhile, Wight is hoping that something can be done to ensure that American-made products can keep up with their cheaper counterparts from overseas.