World's largest steel manufacturing company, ArcelorMittal has decided to cease the operations of two of its steel plants in the US. The two plants are in Lackawana in New York and at Hennepin in Illinois. About 550 employees of both the plants will become jobless after the shut down. As per company source, the production operation of Lackawana steel plant would be closed by April 30. However, no date has been fixed yet for the Hennepin plant.

 

Stating the cause of sudden closure of its US steel plants, ArcelorMittal said that the global economic meltdown along with substantial drop in demand of steel has hit the company's finances very badly. Recently the steel giant has announced a cut its production in North America by 40 percent. A spokesperson informed that the recent decisions are a part of the company's temporary global production cuts of approximately 35 percent.

 

The Lackawana operation leads to higher costs, longer customer lead times, and higher inventory levels as it has some inherent disadvantages including the distance from its substrate supply and the distances from many of its end-use customers. As a result, the company has decided to close the plant. More than 320,000 people in over 60 countries are absorbed in various facilities of ArcelorMittal. Of which 18,000 people are employed in various plants across US.