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Northwest Indiana steel industry not out of the woods yet

It’s not easy to find the Great Lakes Cafe.

The greasy spoon is tucked behind an urban jungle of tall grass and railroad tracks near the lakeshore of Gary, Indiana.

On the menu, the five-egg Steelworker’s Omelet hints at the cafe’s regulars.

“We’re right across the street from U.S. Steel,” said Jessica Quezada, whose father Michael Klidaras has owned the restaurant since 1994. “We have this big complex here with a few refractories and a couple of other companies. We’re very lucky to be here.”

And the folks working inside the massive Gary Works across the street are lucky to have jobs, for now.

More than 700 workers have been laid off at the site — U.S. Steel’s largest plant worldwide — this year alone. There are rumblings that there could be more to come at all five major steel mills in Northwest Indiana.

At the Great Lakes Cafe, retired U.S. Steel worker Malcolm Maxwell worries about the ripple effects.

“It would be very devastating not just in Gary but all of Northwest Indiana,” he said. “You know, you think about other people.”

People like Bob Tribble, an electrician at the Gary Works for 22 years.

“There’s a lot of talk on the shop floor. It does concern us that there’s a possibility of layoffs,” Tribble said.

Union salaries in the mills can range from $50,000 to $100,000, and he says replacing that would be tough.

“These are pretty good jobs. They pay a livable wage with insurance, with pensions. So these jobs are pretty hard to come by,” Tribble said.

Northwest Indiana produces more steel than any other part of the country.

An industry group says for every one job, steel creates seven other jobs in the local economy.

During its heyday in the 1950s and ‘60s, more than 100,000 people worked in the mills in this region. Today, it’s about 20,000.

The domestic steel industry has long experienced booms and busts, but it’s been especially slow coming back from the Great Recession.

Analysts say that’s due to a strong dollar, the falling price of oil, and foreign imports.

“We have a right to protect the house we live in from people who want to burn it down or take advantage of us,” said U.S. Rep. Peter Visclosky, a Democrat from Merrillville.

Visclosky, who represents Northwest Indiana, has spent 30 years fighting against so called “steel dumping.” That’s when foreign manufacturers flood the market with low-cost steel.

Last month Visclosky helped pass legislation that makes it easier for American steel companies to prove they’re being hurt by the practice.

“We don’t have to be bankrupt, we don’t have to be out of business to prove injury. That’s a huge advantage to the industry,” Visclosky said.

But not everyone buys that excuse.

“They always like to blame somebody else. The biggest importer of steel is the U.S. steel industry,” said longtime steel analyst Charles Bradford of New York City.

He says imposing tariffs on foreign steel companies let’s U.S. producers off the hook.

“It tends to relieve the companies from a lot of pressure on improving their facilities,” Bradford said.

The American Iron and Steel Institute disputes this. It says companies have invested millions in technology while also reducing costs.

But just this week, U.S. Steel reported a 2nd-quarter loss of $261 million. Steel giant Arcelormittal will soon shutter one of its wire rod facilities in South Carolina.

At ArcelorMittal’s three plants in Northwest Indiana, workers worry they could be next. The company already laid off 300 workers here in January.

Jose Cortez has worked at an ArcelorMittal plant in East Chicago for 12 years.

“There’s always talk about shutting this down or shutting that down,” Cortez said.  “I’m not sure what the company specifically intends to achieve with that, but there’s always a little bit of that during contract time.”

The current contract expires September 1. The United Steelworkers of America is in talks with both ArcelorMittal and U.S. Steel.

Cortez says he’s already saving money just in case.

“I’ve worked since I was 15. I have never been without a job. You’d just have to make do,” Cortez said.

Michael Puente is WBEZ’s Northwest Indiana Bureau Reporter. Follow him on Twitter @MikePuenteNews

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