LaPlace, Louisiana-based Bayou Steel Group, a mid-size steel producer, has announced the layoff of more than 376 employees as its LaPlace steelmaking facility located on the Mississippi River. The company appears to have run out of the cash needed to purchase raw materials, mainly scrap steel from abroad that is subject to tariffs, and has defaulted on payments to creditors.
According to a statement issued by the company…
“On October 1, 2019, Bayou Steel Group conducted a reduction in force, idled most of its operations, and filed for protection under chapter 11 of the Bankruptcy Code. This unfortunate situation was created by a severe lack in liquidity at the Company,
which resulted in a default with its senior secured lender, and created a situation where the Company could no longer purchase raw materials. The Company will continue to engage in limited production to finalize finished goods over the next few weeks and will use the bankruptcy process to sell off the remainder of its inventory and attempt to sell substantially all of its reaming assets via section 363 of the Bankruptcy Code to a strategic or financial buyer that will hopefully re-start operations.”
Since it is extremely difficult to idle steelmaking machinery, it is possible that a complete plant closure will result in additional layoffs.
Change is coming. There will always be a tomorrow, no matter how much you may try to ignore it. There are no guarantees in life or promises for a bright future. Just because something bad hasn't happened yet, doesn't mean it won't. It can happen to anyone, anytime, anywhere. No one is guaranteed to wake up tomorrow and still have a job by evening. Are you now wondering, Am I Next?