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An electric arc furnace heats the iron to 2,600 degrees as temporary workers at ME Global pour the molten iron into a ladle for testing. (2000 file / News Tribune)

Duluth foundry to lay off 39 workers due to recession

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A recent slowdown in mining activities will prompt ME Global of Gary-New Duluth to lay off 39 workers a week from today. The foundry employs 103 people.

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ME, based in Minneapolis, manufactures steel castings and other high-wear parts for the mining industry at its facility in Gary-New Duluth.

"The layoffs are a result of a continued reduction in demand for the iron ore business," Bill Grau, the plant manager, said in a prepared statement. "We continue to monitor our customer base and will make production adjustments to support our customer backlog."

Workers at the foundry already had seen their hours reduced by 20 percent, from 40 hours per week to 32. When the layoffs take effect, the employees who remain will return to a 40-hour week, according to Bruce Lotti, president of United Steelworkers Local 1028.

In terms of feeling the effects of a mining downturn, Lotti said: "It seems like we're usually the last ones in and the last ones out."

Although the duration of the layoff remains uncertain, Lotti said he and others are hopeful workers could be recalled by this fall.

The foundry had been preparing to boost its daily production from 100 to 120 tons of steel when business began to fall off, according to Lotti. After the pending round of layoffs, he expects the plant's production will drop to about 60 tons per day.

Lotti said the union and company management have agreed to discuss the possibility of allowing senior staff to take a voluntary layoff to keep some younger workers with less seniority on the job.

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