PITTSBURGH (AP) -- United States Steel Corp. plans to recall about 800 laid-off workers at a plant in Canada this summer, partly to avoid possible severance payments under a provincial law, a union representative said Monday.
Like other steel companies, U.S. Steel has faced dwindling orders as the global economic crisis shrinks demand for the metal used in everything from cars to office buildings. The company has laid off thousands of workers since last fall as it has scaled back production in an effort to match the falling demand.
U.S. Steel said Friday it plans to recall the workers at its plant in Hamilton, Ontario, sometime this summer, according to Rolf Gerstenberger, president of the United Steelworkers' Local 1005.
The move was prompted partly by a provincial law in Ontario that would require U.S. Steel to set aside about $15 million for possible severance pay to workers laid off more than 35 weeks in a 52-week period, he said.
A U.S. Steel spokeswoman, Erin DiPietro, declined to comment, but said the company was continuing to adjust operations across North America "to stay in line with customer demand and to adjust our work force as appropriate."
The Hamilton plant employed about 1,700 people before some 700 workers elected to retire early and slightly more than 800 were laid off in waves starting in November. Others had planned to retire earlier from the plant, which currently employs about 115 people, he said. The plant was idled in October.
U.S. Steel plans to restart ovens at the plant used to make coke, a fuel used in blast furnaces, "and we're going to ship it to the Granite City plant," said Gerstenberger, referring to a U.S. Steel facility in Illinois.
He said he did not know of a timetable to resume steel production at the Hamilton plant.
Shares of U.S. Steel slid $2.27, or 5.8 percent, to $37.05 in afternoon trading.