Cascade Steel to lay off 70 workers

Cascade Steel Rolling Mills is planning to shed 70 positions later this month, reducing its workforce from 440 to 370. It cited challenging market conditions and stiff competition from foreign producers.

A subsidiary of Schnitzer Steel Industries Inc., based in Portland, Cascade Steel is one of the West Coast’s leading steel recyclers and producers. It is also one of McMinnville’s major employers, both in terms of positions and pay levels.

According to a statement released by the company Friday, it is planning a “permanent” reduction of roughly 15 percent, including both union and non-union positions. The union workers are represented by United Steelworkers Local 8378, which did not return calls by press time.

The shift reduction will occur around mid-February, the first significant cutback since the 2008 recession.

“Today’s decision was not made lightly, and comes after careful deliberation,” said President Jeff Dyck. “We value the strong contributions of our employees. However, we are constantly evaluating our production levels and our cost structure to maintain our advantages in an increasingly challenging market.”

Mill employment peaked at 550. The 2008 recession resulted in a series of layoffs, ultimately reducing employment to its current level. Then, as now, the company pointed to market conditions and a flood of cheap imported steel.

According to the American Iron and Steel Institute, steel imports declined 13 percent last year, largely because China shipped less of its steel to the U.S. and more of it to Vietnam.

But on Wednesday, the industry group said import permit applications rose 16 percent in January. It said proposed import volumes were up 56 percent for Turkey, 50 percent for Japan, 30 percent for Brazil, 10 percent for South Korea and 3 percent from Germany, from a December total of 2.3 million tons.

The local mill, where electric arc furnaces consume more power than all other local users combined, is facing the prospect of “significantly increased steel imports,” Dyck said.

“It’s international,” he said. “It’s not just one country.”

Dyck said the company would “continue to monitor market conditions.” He promised it would ratchet production levels back up “when market circumstances warrant.”

The layoffs represent just the latest in a series of blows to Yamhill County’s manufacturing sector in recent weeks.

In November, WestRock idled its newly acquired Newberg paper mill. Late last month, the international paper giant made the closure permanent, eliminating 220 relatively high-paying jobs, mostly held by members of Association of Western Pulp and Paper Workers Local 60.

Newberg-based Climax Machine Tools laid off at least 20 employees last month as well. Those layoffs come against a national backdrop of a sluggish manufacturing sector that has slumped to the point it only accounts for only about 10 percent of the economy.

Industrial production, as measured by the Federal Reserve, fell 1.8 percent in December. That was the steepest drop logged since the troubled times of 2009.

A weak manufacturing sector can be a harbinger of recession. Still, most analysts say a period of slowing is more likely than an outright recession.

Economists at Bank of America Merrill Lynch put the odds of a recession in 2016 at 20 percent, up from 15 percent a few months ago.

— The Associated Press contributed to this report.