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Layoffs averted at UTac mine; employee hours cut instead

The company notified the state that, without reduced hours, it stood to lay off up to 49 people initially and another 19 people in three months.

Cliffs Natural Resources Inc., UTac's owner, unveiled a compromise deal Monday with United Steelworkers Local 6860, which represents most of the 516 people employed at the mine.

Last week, Cliffs announced plans to cut production at UTac and Northshore Mining in Silver Bay and Babbitt by a combined 300,000 tons of pellets per month. That represents a reduction in output of more than 30 percent for the two mines.

Rather than resort to layoffs, the company and union agreed that hourly workers at United Taconite would switch to a 32- versus a 40-hour work week for a three-month period, beginning Nov. 9.

At the end of those three months, Cliffs will reevaluate the situation. The company has already filed paperwork notifying the state of Minnesota that, without reduced hours, it stood to lay off up to 49 people initially and another 19 people in three months' time.

Cliffs is still developing a staffing plan at Northshore, where 561 people work, according to Maureen Talarico, a company spokeswoman. She said there have been no layoffs yet at Northshore, the only non-union mine on Minnesota's Iron Range. But Cliffs has tried to eliminate all overtime and contract work at the mine.

"We're still in the process of analyzing where we're at," said Talarico, pledging: "We will work as hard as we can to not have layoffs."

Reacting to steelmakers' reduced demand for iron ore pellets in a beleaguered economy, Cliffs has ratcheted down its mine production, and Talarico said the company will need to adjust to market conditions as they continually evolve.

Two furnaces at Northshore and one at UTac have been idled. Cliffs CEO Joe Carrabba said the affected Northshore lines had the highest production costs in the company.

Meanwhile, one furnace at United Taconite will temporarily cease production, and Carrabba said it was due for significant maintenance at any rate.