CANTON, Ohio (WJW) — Steelmaking once done in Northeast Ohio will now continue in Mexico with the indefinite idling of a local steel mill.
A representative of the Ohio-based company blamed U.S. inflationary pressures.
Republic Steel mills in Canton and Lackawanna, New York, plan to cease steelmaking operations, according to a Thursday news release from Grupo Simec, which acquired the Canton-based steelmaker in 2005.
About 500 Republic Steel employees will be “furloughed indefinitely” as part of the consolidation, according to the release.
“We’re facing an extremely challenging [special bar quality] steel market in the U.S., with competitive market pricing and increased demand,” Jaime Vigil, Republic Steel board member, is quoted in the release. “At the same time, we’ve had to deal with increasing input costs on all raw materials, consumables and labor, all as a result of the inflationary environment in the U.S. over the past year.”
Though the company hoped for relief from inflationary pressures following the passage of the congressional infrastructure deal nor the Inflation Reduction Act, “neither came to fruition in a timely manner,” the release reads. Some of its facilities are also more than 100 years old, according to the release.
Republic Steel customers will now get product from Grupo Simec’s “state-of-the-art” mill in Tlaxcala, Mexico, according to the release. Consolidating operations there “enables more competitive pricing,” according to the release.
Grupo Simec and Republic Steel are the last producers of leaded steel in North America, according to the release.
Leaded steel is better for machining but comes with toxic exposure risks. The company has taken steps over the last several years to comply with environmental regulations on leaded steel production, putting $10 million into its Canton plant to keep it up to date and “to respond to the ever-changing obligations imposed upon it by local, state and federal environmental regulators.”
“This isn’t an easy decision,” Vigil is quoted in the release. “But we feel it’s the only way for us to continue to serve our U.S. customer base with an ongoing and reliable source of product, including leaded steel, and to do so at a competitive price point. Ultimately, we’re responsible to our shareholders and our customers. We’re simply doing what needs to be done to meet our responsibilities.”
Republic Steel maintains other locations in Massillon and Lorain, as well as in Gary, Indiana, and Ontario, Canada.
The company began in Canton in 1886 as Berger Manufacturing Co. and was later rolled into Republic Steel Corp. in 1930, according to its website.
“Throughout the 1900s, Republic’s steel was instrumental in fighting a war and building a nation,” the website reads. “Its steel bar products were instrumental in developing America’s automotive, agricultural and aerospace industries.”