Posts Tagged ‘U.S. Steel’

U.S. Steel Selling 6 Railroads

June 10, 2021

U.S. Steel’s Transtar subsidiary has reached a deal to sell six of its railroads including two in Lorain.

The railroads are being sold to a subsidiary of Fortress Transportation and Infrastructure Investors for $640 million.

The sale agreement includes a 15-year contract to maintain operations at the six railroads.

The railroads include the Lake Terminal Railroad, which serves Republic Engineered Products and Lorain Tubular in Lorain and the Lorain Northern, is the contract switching carrier at U.S. Steel’s Lorain Tubular steel pipe plant.

Also included in the sale is the Union Railroad, which operates 65 miles of main track and 200 miles of yard tracks within a 10-mile radius in the Pittsburgh region.

The Union hauls steel, coke, coal, chemical, aggregate, lumber, and automotive industries.

Other railroads involved include the 15.46-mile Delray Connecting Railroad in Detroit; the 63-mile Gary Railway, which serves mills run by U.S. Steel and ArcelorMittal in Indiana among other customers; the Fairfield Southern in Alabama; and the Texas & Northern in East Texas.

The sale is expected to close in the third quarter of this year subject to regulatory approval.

Transtar Looking to Unload Railroad Properties in Ohio, Pennsylvania, Michigan and Indiana

June 26, 2020

Railroads owned by United States Steel Corporation may be for sale, Trains magazine reported on Thursday.

The report said the railroads, which are held by U.S. Steel’s Transtar subsidiary, are on the block as the steel maker struggle during a recession triggered in part by the COVID-19 pandemic.

The company is expected to announce a loss of $315 million in the second quarter of 2020 and is reportedly seeking to sell various real estate properties.

U.S. Steel declined to comment about the matter, but Trains cited “multiple rail industry sources” as saying the railroads would be placed on the sale block soon.

The company has suspended operations at much of its Great Lakes Works near Detroit, as well as the idled various production lines at plants in Indiana, Ohio, Pennsylvania, and East Texas.

Among the Transtar rail properties is The Lake Terminal Railroad, which serves Republic Engineered Products and Lorain Tubular in Lorain as well as the Lorain Northern, a contract switching carrier at the Lorain Tubular steel pipe plant.

Pittsburgh-based Transtar also owns the Union Railroad, which operates 65 miles of main track and 200 miles of yard tracks in Pittsburgh. The Union carries steel, coke, coal, chemical, aggregate, lumber, and automotive industries.

In Michigan, Transtar operates the 15.46-mile Delray Connecting Railroad, which serves U.S. Steel’s Great Lakes Works outside of Detroit.

In Indiana, Transtar owns the 63-mile Gary Railway, which serves steel mills of U.S. Steel and ArcelorMittal as well as other customers.

Transtar also owns railroads in Alabama and Texas.

U.S. Steel is moving away from large integrated steel plants in favor of mini-mills, which it has said are more efficient than integrated steel mills.

U.S. Steel to Idle Much of its Great Lakes Works

December 23, 2019

U.S. Steel plans to lay off more than 1,000 workers in the Detroit area as it begins idling next spring what it termed a significant portion of its Great Lakes Works in Ecorse and River Rouge.

By the end of 2020 the company said the hot strip mill rolling facility will be idled.

The Pittsburgh-based company said production now done at Great Lakes Works will shift to a plant in Gary, Indiana.

The idling will result in layoffs for 1,545 workers U.S. Steel said of the move, which it framed as a response to market demand.

In a news release, U.S. Steel said no employees at the Zug Island plant will lose their jobs before next April.

The news release said the final number of layoffs at Great Lakes Works might be lower than 1,545 because some operations will continue.

These include the pickle line, cold mill, sheet temper mill, continuous galvanizing line, annealing and warehouses.

“Transitioning production currently at Great Lakes Works to Gary Works will enable increased efficiency in the use of our assets, improve our ability to meet our customers’ needs for sustainable steel solutions and will help our company get to our future state faster,” said David Burritt, president and CEO of U.S. Steel, said in a statement.

The statement said the company took into account current market conditions and the long-term outlook for the Great Lakes Works.

The latest move is the second time that production at the Great Lakes Works has been curtailed.

Last August the company announced it was temporarily laying off 200 workers due to idling a furnace due to reduced consumer demand and market conditions.

Crain’s Detroit Business reported that the impact of tariffs imposed by the Trump Administration on Chinese steel imports two years ago may have contributed to the decision to idle the Great Lake Works.

The magazine said U.S. Steel ramped up production at a time when the global economy was cooling and that undercut demand and led to lower prices for steel.

Industry observers have noted that U.S. Steel has older production facilities that are less efficient than those of rival steel companies that use mini mill production.

U.S. Steel has had a series of different strategies in the past two years, leading some to “raise concerns that there’s no long-term, overriding execution capability to improve competitiveness,” wrote Richard Bourke, a senior credit analyst at Bloomberg Intelligence, in a note to investors.  “Cash costs from layoffs will likely exceed savings from the cuts, in our view.”

Bloomberg reported that the price of domestic steel is down about 40 percent from its 2018 high, which it reached a few weeks after the tariffs were imposed.

U.S. Steel shares have fallen in value this year by a about a third, hitting their lowest levels since October 2016.

Bloomberg said the company expects to report a 98 percent drop in profits for 2019.

The idling of the Great Lakes Works has raised questions about how well U.S. Steel will be able to supply steel for automotive industry parts after it moves production from Detroit to Indiana.

“They just idled their main automotive mill,” said Dan DeMare, a regional sales manager for Heidtman Steel, a Toledo, Ohio-based steel distributor. “They have bet everything on their commercial ability to be viable and offer the cost to market that’s required, and they’re going to have facilities, equipment and a plan to execute. They’ve failed miserably at that so far.”

In an interview with Bloomberg Television, U.S. Commerce Secretary Wilbur Ross contended that the idling of the Great Lake Works plant doesn’t mean that the steel tariffs aren’t working.

Ross argued that U.S. Steel suffers from high costs and that many of those losing their jobs will be able to find work at nearby General Motors and Ford Motor plants.

Pa. Museum Gets Grant to Move Locomotives

May 6, 2015

The Lake Shore Railway Historical Society has received a $3,000 grant to be used to move locomotives to the group’s museum in North East, Pa.

The Thomas E. Dailey Foundation of Chicago made the award to enable the museum to receive the first diesel-electric locomotive owned by New York State short line Genesee & Wyoming. The locomotive is currently in Youngstown.

Built in 1944, the 80-ton locomotive will become the seventh General Electric-built unit in the museum’s collection.

The museum will also use the grant money to move McDonald Steel Alco S2 No. 777 to North East. No. 777 was built in November 1946 and used at the Ohio Works of U.S. Steel in Youngstown, replacing a 0-6-0 steam switcher.

The Ohio Works used blast furnaces and steelmaking furnaces to make steel that it rolled into such semi-finished shapes as blooms and slabs.

Those were moved over the 3.5-mile Youngstown & Northern Railroad to finishing mills of the McDonald Works.

After being moved to North East, the 777 will keep its McDonald Steel paint scheme and be dedicated to David Houck, founder and first president.

Few Moving Trains, But An Enjoyable Outing

January 13, 2015

An abandoned bridge that once carried a Pennsylvania Railroad branch line in New Brighton, Pa.

An abandoned bridge that once carried a Pennsylvania Railroad branch line in New Brighton, Pa.

Last Saturday was a cold but bright day; it was perfect for photography.  A trip down the Ohio and Mon river valleys was in order.

My first stop was the Youngstown & Southeastern, but it being a weekend nothing was moving.  The next stop was New Brighton, Pa., to find the remains of the original Pennsy mainline and a branch that served a steel mill in Rochester, Pa.

We did find remains of the original Pennsylvania railroad mainline but the branch to Rochester was more difficult to spot.

If you are familiar with the topography of Rochester, the town sits high above the Beaver and Ohio rivers.

The former PRR mainline follows these waterways for a relatively grade-free route.  The Valley Steel Company is located well above the mainline tracks and was served by a switchback branch line.

We found the mill is now just served by trucks. The right of way of the branch is still visible, but we were unable to follow the branch due to poor access.

This is one of the advantages of rail lines; they have the ability to go where roads cannot.  We then drove past the massive Conway yard to Leetsdale.

Leetsdale has a very large industrial park that is served by Norfolk Southern and the Mol-Dok industrial.

The Mol-Dok rosters an SW900, formerly of Conrail and Reading ancestry. Several of the industries have trackmobiles to move freight cars around.  Again, being the weekend there was nothing moving here.

We then proceeded to Neville Island, which lies within the Ohio River.  It is heavily industrialized and served by CSX and the Pittsburgh & Ohio Central railroads.

We found locomotives but nothing was moving. Moving south we followed the Scully Branch out of McKees Rocks to the Wheeling & Lake Erie Rook Yard and finally the NS Mon Line.

The Clairton Coke works of U.S. Steel made for some compelling photos with the afternoon sun.

Our last stop was West Brownsville where an empty coal train was waiting for a trip to the mines.  By now the light had faded and we started our return trip home.

Even though we didn’t catch very many moving trains, it was still an enjoyable day of railfan photography.

Article and Photographs by Todd Dillon

On top of the abandoned bridge that once carried a PRR branch line.

On top of the abandoned bridge that once carried a PRR branch line.

The switch engine in the Leetsdale, Pa., industrial park.

The switch engine in the Leetsdale, Pa., industrial park.

CSX locomotives idle between assignments on Neville Island.

CSX locomotives idle between assignments on Neville Island.

NS coke hoppers at the Clairton Works.

NS coke hoppers at the Clairton Works.

The Pennsylvania Railroad built this bridge over the Monongahela River in West Brownsville, Pa.

The Pennsylvania Railroad built this bridge over the Monongahela River in West Brownsville, Pa.