HOYT LAKES (AP) -- The timing couldn't be worse for the workers of LTV Steel Mining, who expected another eight months on the job.
The company said this week its iron mine and taconite pellet production facilities here will shut down Feb. 24 -- several months sooner than first announced -- with a few hundred workers staying on into the summer to ship pellet stockpiles.
Soon-to-be laid-off workers are now faced with Christmas expenses and predictions of soaring winter heating bills.
For Jerry Fallos, president of their union local, the pre-holiday announcement could have come from the Grinch.
"People are really upset and depressed, and it's tough, especially at this time of the year," Fallos said. "Especially a couple of people have said, 'Geez, I wish I wouldn't have spent so much on Christmas presents now."'
LTV Steel Mining's problems are a mirror of its parent company, LTV Corp., which has been struggling under huge losses -- more than $360 million this year alone. Its stock price has dropped more than 80 percent.
Company officials blame an ongoing steel price war with foreign producers. LTV spokesman Mark Tomasch said the downturn is hurting the company's facilities nationwide.
"We have already idled one blast furnace in Cleveland," Tomasch said. "We have 500 people to date on layoff in the steel plants in Cleveland and Indiana. And we could not allow the losses to continue, so we have to do everything we can to reduce our costs."
Despite imports and competition from mini-mills, U.S. integrated steel producers had been holding their own until this year, said Tony Barrett, an economist at the College of St. Scholastica in Duluth, who monitors the steel industry.
"What's really changed in the last six months is the slowdown in the economy," Barrett said. "With the Fed having raised interest rates over the last year and a half, in order to slow down the economy, it's finally had its impact."
As Minnesota's second-largest taconite operation, LTV produced up to 8 million tons of taconite pellets a year. Some of that production will be taken up by its six remaining former competitors on the Iron Range.
However, demand for pellets has been soft this year, with production lines shut down at Minntac in Mountain Iron and at Eveleth's Evtac. As a result, Barrett warned, the slack economy could undermine any benefits the other companies might have expected from LTV's shutdown.
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