A DeWitt factory has reduced staff and scaled back production after the Trump administration imposed tariffs on imported steel from Canada.
Josh Daniel, plant manager of the Black Cat Wear Parts factory in DeWitt, confirmed the company has "temporarily laid off" 10 of its 17 production employees, effective this week. He said the plant has also scaled back about 80 percent of its production capacity, sending around 90 tons of monthly steel manufacturing to Canada.
Based in Edmonton, Canada, Black Cat has restructured its production after a 25 percent tariff on steel went into effect last month. Canada began imposing retaliatory tariffs this month on $12.6 billion in U.S. goods.
Black Cat produces and distributes construction blades and other wear parts for mining and road maintenance. Daniel said the company chose to move its DeWitt steel production to Canada to avoid paying the tariff.
“Because we’re a global manufacturer and have a manufacturer in Canada, that production has been transitioned back up to Canada where it can be produced and sent back down with no tariff on the finished goods,” Daniel said.
Because it has headquarters in Canada, Black Cat has had an easier transition than some American manufacturers, according to Vice President of Production Management Rob Forgrave. But, the trade dispute is hitting the company’s only U.S. factory in DeWitt especially hard.
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“Our plant (in DeWitt) processes steel from Canada. And the particular steel used to make most of the blades in our business is only rolled in Canada,” Forgrave said. “In our particular industry, U.S. manufacturers are getting hurt because steel is mostly only available in Canada. So those companies have no choice but to either move jobs or pay more.”
Daniel said the restructuring has not affected the warehouse or maintenance operations in DeWitt. He hopes to rehire the laid off employees, depending on future negotiations within the trade dispute.
And the tariffs have halted some plans for future expansion, he said. This year, the DeWitt branch announced it purchased another location to move warehouse activities down the road from its Industrial Street factory. The company planned to keep its current location, at 224 Industrial St., for an expansion in manufacturing.
"There were some growth opportunities we have been looking at, with new opportunities for manufacturing in DeWitt. But the capital equipment that was planned, that's been put on the back burner a bit until the tariff situation resolves itself," Daniel said. "About $500,000 in capital expenditures would have been rolled out, and we use local contractors. Those projects are still on the horizon until we get clarity."
While Daniel remains confident the DeWitt layoffs will only be temporary, he pleaded for a peaceful resolution to the trade dispute.
"In my personal opinion, I would ask for free trade, especially among neighbors," Daniel said. "It is a global economy and supply chains are linked from one country to another country. And to put restrictions and taxes on that, especially among neighbors, is just wrong."
He said it is Black Cat's intention to maintain operations in DeWitt. The blade factory and distribution warehouse opened in 2012.