I. Concentration and Competition in Steel
In 1901 a series of high-level mergers effectively terminated the era of active competition in the U.S. steel industry. The United States Steel Corporation, or "Big Steel," as it came to be...
...Electric arc furnaces have become the mainstay of the "mini-mill," a much smaller and less costly steel mill...
...cit., p. 113...
...For example, the government built an integrated steel plant (including mining facilities) at Geneva, Utah, in 1942-43 at a cost of $191.2 million...
...Moore group...
...X, No...
...Essentially, U.S...
...It doesn't frighten me if it shortens my week...
...89-97...
...Again, the introduction of greater competition in the industry, via foreign steel, was the fundamental reason for this change...
...These " greenfield" plants (as they are called) are the Fairless, Pennsylvania, works of U.S...
...Mueller and Kawahito, op...
...CIA, op...
...1 2 This conclusion was bolstered by two studies commissioned by the American Iron and Steel Institute (AISI), the industry's major trade representative...
...Between 1960 and 1965, productivity rose by an average of 4.1% per year...
...D. Ault,"The Continued Deterioration of the Competitive Ability of the U.S...
...Hans Mueller and Kiyoshi Kawahito, Steel Industry Economics: A Comparative Analysis of Structure, Conduct and Performance (New York: Japan Steel Information Center, 1978), p. 7. 7. See, for example, C.R...
...Putnam, Hayes & Bartlett, Economics ofInternational Steel Trade: Policy Implications for the United States...
...cit., p. 16...
...Putnam, Hayes and Bartlett, 1977, pp...
...53-4...
...For the first time since 1907 when Judge Gary sat down to dinner with the other U.S...
...The Council on Wage and Price Stability recently acknowledged this critical competitive function of foreign steel...
...In a letter "to the members and families of the NACLA Report 8JanlFeb 1979 9 United Steelworkers of America," David McDonald, Howard Hague and I.W...
...In 1956, for example, it took 60.7 employee hours to produce a metric ton of steel in Japan and only 16.3 hours in the United States...
...Costs are lower in Japan and the Japanese government's subsidies to its steel producers are so minimal as to be insignificant...
...9915. Adams, op...
...steel production was located on coastal sites, accessible to large freighters, compared to 82% of Japanese production...
...Twenty years later it took 10 employee hours to produce a metric ton in Japan and 11.8 in the United States...
...or they could push their old equipment as far as possible without making major repairs: According to Ike Gittlen, a steelworker in Steelton, Pennsylvania, the companies are following the last alternative: Foremen (are) urged to operate furnaces in a reckless fashion to get the highest ton-per-hour rate possible and all maintenance is of the patchand-go variety so that down time is minimized...
...This has been particularly evident since 1967.9 As Chart I demonstrates, this corresponds to the years in which foreign imports began to make a serious dent in the domestic market...
...In this section we will begin to examine the reasons why...
...Each side has mustered its own team of economists to demonstrate through elaborate forward and backward projections that yes, there has, or no, there has not, been dumping-which only recalls Mark Twain's definition of the three types of lies which exist: lies, damn lies and statistics...
...Steel Industries, 1955-1970," Economia Internationale (February 1974), pp...
...Unfortunately, an analysis of internal dynamics within the USWA lies outside the bounds of our present study...
...All seem to agree that the largest producers were quite often the last ones to adopt new techniques...
...FTC, op...
...It concluded that the U.S...
...Most analysts note that pricing behavior in the domestic steel industry began to change in the late 1950s and early 1960s, with prices becoming gradually more responsive to demand...
...FTC, op...
...cit., pp...
...Our next task is to determine if this competition reflects the lower costs of foreign steel or if, as U.S...
...Betheil, op...
...First, what is steel...
...94-5...
...According to many union members, however, this lack of democracy in the union and the leadership's ever more conciliatory policies toward capital, did not originate in this period, but merely became more accentuated...
...7 Opponents of base point pricing, including the Federal Trade Commission, have stressed that it promoted collusion and the elimination of any price competition...
...Indeed, even as U.S...
...3 4 Moreover, the Central Intelligence Agency, in a study of the world steel industry, reported that Japanese blast furnace design and operations are "the best in the world, and the highly efficient basic oxygen furnace operations are the envy of the world's steelmakers...
...order to reach parity with the Japanese steelworkers and again make domestic steel more competitive on the world market...
...cit., pp...
...producers not maintained these high levels of spending but, according to the Bureau of Labor Statistics, real spending is moving backwards...
...cit., p. 10...
...Cited in Betheil, op...
...Regardless of the system, steel prices have risen faster than the national industrial average...
...Mueller and Kawahito, op...
...AISI, Annual Statistical Reports...
...cit., p. 17...
...Quoted in Staughton Lynd, "History of the United Steelworkers of America," Part V, Guardian, April 25, 1973...
...4. Subcommittee on Antitrust and Monopoly, Committee on the Judiciarv...
...10-11...
...It wasn't long before the new-born behemoth had its hooks into the essential problem faced by capital: price competition tends to reduce profits...
...In fact, no sooner did imports begin to win a slice of the American market than steel producers started tackling the cost problem...
...FTC, op...
...4 3 As a result, U.S...
...Although the 1959 strike ended in a standoff, it has been called "the turnaround between the steelworkers' offensive and management's counteroffensive...
...Cold rolling mills reform sheets and other semi-finished forms (produced by hot rolling mills) without a second-heating...
...Mike Lefevre, Chicago steelworker 2 7 Japanese and other foreign producers not only enjoy lower labor costs than U.S...
...Mueller and Kawahito, op...
...In June 1946 the plant was sold to U.S...
...producers stack up against foreign competitors in terms of the application of technology advances...
...Estimates from David R. Dilley, "Financing Future Capital Expenditures," in Szekely, op...
...The intended negative effect that such policies have had on wages, however, has not prevented foreign steel from penetrating the U.S...
...2 " Nevertheless, by 1959 steelworkers received an average wage of $3.10 an hour, 91C an hour more than the average for manufacturing and about $2.60 an hour more than Japanese steelworkers made...
...Putnam, Hayes and Bartlett, 1977, p. 39...
...By 1968, foreign imports were absorbing nearly 20% of the market...
...148-54...
...In 1959 the American Iron and Steel Institute counseled steelworkers, then in the midst of contract negotiations with the steel industry, that: The great advantage of foreign steel producers is that their wage rates are much lower than ours...The narrowing margin of U.S...
...3 0 Once molten steel is produced, it must be shaped...
...4 Furthermore, the AISI studies identified the Japanese-the major exporters of steel to the United States-as the worst offenders...
...The upshot, simply, is that it costs less to make steel in Japan both because wages are lower and because output per employee is higher...
...The United States Steel Corporation, or "Big Steel," as it came to be known, was the powerful progeny of three of the largest financial groups of the time: the Andrew Carnegie group, the J.P...
...2 Morgan and the others argued that the giant company would allow for more efficient production, greater technological advances and lower costs...
...Since 1959, wage increases in the steel industry, while still high for manufacturing as a whole, have declined in relation to what workers were able to win in the 1949-1959 period...
...producers, but output per employee hour in these countries is also going up much more rapidly than in the United States...
...Needless to say, the steelworkers did not react kindly to a suggestion that they accept a more than 80% reduction in wages in JanlFeb 1979 7a AL Rpr Jones & Laughlin's Pittsburgh Works start up after 116-day strike in 1959...
...cit., p. 189...
...2 9 The "cold-metal" route obviates blast furnaces and coking ovens by eliminating the pig iron stage and refining scrap steel or other solid-state iron directly into molten steel in an JanlFeb 1979 9NACLA Report "electric arc furnace...
...Indeed, when faced with a choice between expanding markets by adopting a more competitive pricing posture or bolstering profits by raising prices when competitive pressures are re moved, the industry has consistently opted for fatter profits...
...David Gordon and JosephJ...
...2 4 As we have argued, the major element in this turnaround was the reintroduction of competition into a monopolized industry...
...3 9 This may seem like a huge sum, but, in fact, it isn't...
...Charles Stern, the president of the American Institute for Imported Steel, predictably called the steelmakers' charges "a fantastic propaganda campaign...
...technical superiority can no longer overcome so enormous a cost disadvantage...
...The most significant factor in this reversal has been the introduction of new technology into the steelmaking process, allowing workers to turn out more steel in less time than before...
...As with the BOF, continuous casting, by eliminating approximately half the steps of hot rolling mills, can produce the same amount of steel with 10-15% less labor power...
...steel industry "would benefit from a reduction of imports only to the extent that the removal of' competition allows it to fatten profit margins by raising prices...
...Steel companies in Japan built nearly 100 million tons of greenfield capacity in the 1960s and 1970s, as compared with only 10 million tons in the United States...
...In general, most writers have found that U.S...
...market...
...Steel (built in 1953) and the Burns Harbor, Indiana, works of Bethlehem Steel (1967).38 The U.S...
...As of 1975 only 10% of U.S...
...In a single action, a "combination of combinations," more than 65% of the nation's steel capacity was united in one firm...
...COWPS, op...
...Since 1970 steelmill prices have risen above those of all industrial products by 33%.8 Not even Kennedy's legendary "jawboning" of the steelmakers served to counteract this trend...
...cit., p. 7. 25...
...Moreover, a study undertaken by the Federal Trade Commission (FTC) in 1977 also concluded that the net effects of government subsidies on the steel industries ofJapan and the United States were quite minimal, amounting to a 46C a ton advantage for Japanese steelmakers over the 1957-75 period...
...The molten iron is then combined with carbon, other alloys and scrap steel at temperatures up to 3000' F. This process first took place in Bessemer furnaces (developed in the mid-19th century), open hearth furnaces (dominant in the first half of the twentieth century), and now, increasingly, in the basic oxygen furnaces (BOF...
...Senate, October 4, 1977, p. S16257...
...At the end of the war it turned these plants over to the largest steel companies, their wartime managers...
...Market (Newton, Mass: Putnam, Hayes and Bartlett), 1978...
...William T. Hogan, Economic History of the Iron and Steel Industry in the United States, V (Lexington, Mass: Lexington Books, 1971), p. 2090...
...cit., p. 143...
...9. Federal Trade Commission (FTC), The United States Steel Industry and Its International Rivals: Trends and Factors Determining International Competitiveness (Washington, D.C.: Government Printing Office, 1977), Chapter 4; Richard Mancke, "The Determinants of Steel Prices in the United States: 1947-1965," Journal of Industrial Economics (April 1968), pp...
...Before 1959 the United Steelworkers of America (USWA)--which had organized 90% of basic steel by 1942-was able to boost wages significantly without yielding any ground in the important areas of organization or pace of work...
...Essentially, it is iron alloyed with a certain percentage of carbon or other minerals...
...steelmakers argue, it represents "unfair" competition, the dumping of below-cost steel...
...Similar conclusions have come from less immediately interested sources such as Charles Bradford, of Merrill, Lynch or Sanford Rose, a noted editor at Fortune, who wrote, "Japan's export success, which is causing such consternation in the United States these days, does not depend to any appreciable degree on such illegal trade tactics as dumping...
...Ralph Hindson, "The Changing, Map of the World Steel Industry," inJulian Szekely, The Future of.the World's Steel Industry (New York: Marcel Dekker, Inc., 1976), p. 78...
...The unavoidable inference from this fact is that foreign producers were selling below their full production costs...
...Morgan group and the W.H...
...How do U.S...
...3 5 They are clearly the envy of U.S...
...To answer this we must look at two important factors in cost: the cost of labor and the productivity of labor, which is a reflection of both the application of technology and the struggle between labor and capital...
...steel one plant-the Gary works-which was larger than the total operations of Jones & Laughlin, National Steel, Youngstown Sheet & Tube, Armco Steel and Inland Steel!5 By 1950 twelve firms dominated the industry, controlling more than 85% of blast furnace capacity, steel production and control of iron ore reserves...
...The furnaces are in a sad mechanical state and suffer an increasing number of small delays...
...As we have seen, from the end of World War II until the late 1950s, the steel companies fixed prices without the constraints of price competition, which generated a long period of monopoly profits for the industry...
...At the present time over 80% of Japanese steel is fired in basic oxygen furnaces "Fire in every horrible form: pits of flame waving in the wind...
...steelmaker recently contracted with Nippon Steel for a team of experts to advise it on design changes in its biggest blast furnace at Gary, Indiana...
...An Analysis and Forecast for American Iron and Steel Institute (Newton, Mass: Putnam, Hayes and Bartlett, Inc...
...steel industry invested almost $35 billion in steelmaking facilities between 19571976, an average of $1.7 billion a year...
...In a hot rolling mill, the molten steel is poured into ingot molds where it cools and is then reheated and shaped by a system of rollers...
...167-189...
...Bureau of Labor Statistics, Technological Change and Manpower Trends in Five Industries, Bulletin 1856 (Washington, D.C.: Government Printing Office, 1975), pp...
...The largest U.S...
...In the words of economist Walter Adams: He exhorted them like a Methodist preacher at a camp meeting to follow the price leadership of U.S...
...3 This practice of "friendly competition" allowed U.S...
...Recently, the foremen took some bad risks and two major breakdowns resulted...
...107-8...
...The electric arc furnace has been adopted by two types of producers, those with small supplies of coking coal or iron but with large supplies of scrap steel, and those with not enough space for a fully integrated steel mill...
...In These Times, October 4-10, 1978...
...While many factors pushed for a highly centralized industry-such as the monopolization of raw materials in the hands of a few companies, or the increasing cost of building steelmills-the U.S...
...Others strongly disagree with the AISI's conclusions...
...liquid metal-flames writhing in tortuous streams...
...Steel, instituted his "Gary dinners," social gatherings to which he invited nearly every steel producer in the country...
...Business Week, August 21, 1978...
...cit., p. 7. 23...
...The result was a massive 116-day strike which virtually shut down the industry and idled 250,000 workers in secondary industries as well...
...COWPS study...
...To begin to cut through this Gordian knot, we must start with the basic question: Does it cost more or less to produce steel in the United States or Japan, to cite the major foreign competitor?Five major studies have examined the comparative costs of steel production in these two countries...
...3 6 Costs of shipping and transport are also much higher for U.S...
...31, 35, 36...
...Throughout the late 1960s, foreign producers did not have sufficient cost advantages to account for the difference between their prices on U.S...
...steelmakers, bankers and other interested parties are doing about this fair competition, we will see how intensified competition reflects a much larger process: the restructuring of production on a world scale...
...Steel to avoid the trust-busters and maintain industry discipline over pricing for decades...
...Abel (USWA president, vice president and secretary-treasurer, respectively) cautioned that: while your attention and the eyes of the public have been fixed on the alleged effect of 'inflation' and 'foreign competition,' the steel corporations mapped their plan to atomize and completely undermine your job rights...
...The BOF (and its more advanced successor, the "Super BOF") is considered more efficient since it requires substantially less labor power per unit of output-roughly onefifth the labor power of the open hearth process...
...Steel merely assumed the lead incumbent on a firm its size...
...It frightens me if it puts me out on the street...
...To calm these troubled waters, Judge (Elbert H.) Gary, the president of U.S...
...Bureau of Labor Statistics, Bulletin 1983...
...Tom Seidl, "Working Paper on the 'Steel Project': 'Economic Consequences on Steel Workers...', unpublished manuscript...
...they could add new parts to their old plants in a piecemeal fashion (which doesn't yield the same productivity gains...
...cit., pp...
...Mueller and Kawahito, op...
...Richard J. Leary, "Economic and Technologic Factors in Steelmaking," in Szekely, op...
...3 3 In contrast, U.S...
...Analysts estimate that steelmakers will have to spend at least $5-6 billion a year just to maintain production at current levels, and over $18 billion a year if capacity is to be increased by 30 million tons in the near future...
...steelmakers are left with several alternatives: They could inject massive amounts of capital into the construction of new, modern mills...
...Bureau of Labor Statistics, Bulletin 1856, p. 27...
...Between 1949 and 1959 steelworkers engaged in at least one major strike a year, including a massive wildcat by 400,000 workers in 1955...
...13 Not unexpectedly, the AISI studies confirmed the steel companies' worst fears...
...Business Week, October 24, 1977...
...The Economic Implications ofForeign Steel Pricing Practices in the U.S...
...Although a lengthy series of mergers among top steelmakers produced for U.S...
...Depends how it's applied...
...producers turn out only slightly more than 60% of their steel in BOFs, and still employ open hearth furnaces...
...2 5 The post-1959 period also marked the increasing isolation of USWA leaders from the rank and file...
...2 3 In rejecting the industry's 1959 proposal which called for greater productivity at constant wages, the USWA maintained its principle of refusing to yield the controls it had won on the shop floor...
...22-3...
...market in significant quantities after 1959, has forced the industry to compete, a fact that has greatly disturbed them...
...Business Week, September 19, 1977...
...THE INTERNATIONAL COMPETITIVENESS OF THE U.S...
...By examining what U.S...
...Government Printing Office, 1958), pp...
...Hearings, 85th Congress, First Session, October 29, 30, Nov...
...Central Intelligence Agency, World Steel Market: Continued Trouble Ahead (Washington, D.C.: CIA, 1977), p. 10...
...4 ' Not only have U.S...
...2 (Summer 1978), p. 23...
...Their solution was, to say the least, typical...
...21-25...
...firms because of their inland locations...
...2. Walter Adams, "The Steel Industry," in Walter Adams, ed., The Structure of American Industry...
...shipments and the price of comparable domestic shipments...
...3 2 By the late 1960s it was evident that U.S...
...2 6 THE TECHNOLOGY OF STEELMAKING Automation...
...On technology and the process of steelmaking, see Dale L. Hiestand, High Level Manpower and Technological Changes in the Steel Industry (New York: Praeger, 1975), pp...
...cit., pp...
...Daugherty, M.G...
...steel producers, the domestic industry was forced to eat crow and adopt a more competitive pricing behavior...
...1 We see, then, that foreign steel, entering the U.S...
...Emphasis in original, AISI, "Economic Trends in Iron and Steel Industry," 1959, cited in Richard Betheil, "The ENA in Perspective: The Transformation of Collective Bargaining in the Basic Steel Industry," Review of Radical Political Economics, Vol...
...They have concluded that Japanese costs (which include all labor and employment costs plus the cost of raw materials, but not shipping, capital costs or profits) are between 31% and 82% less than average costs in the U.S...
...cit., p. 7. 35...
...Hogan, op...
...steel companies had completed their major period of expansion in the early 1950s, shortly before the basic oxygen furnace and the continuous caster were commonplace...
...Integrated mills are absolutely immense affairs, containing all parts of the steelmaking process from coking ovens and blast furnaces to heating vessels and rolling mills...
...150-51...
...2 1 In large measure, the steelworkers' success in fighting for higher wages, without "paying" for it in terms of increased productivity, was determined by rank-and-file militancy...
...The rolling mills which shape and form molten steel are at the heart of most steel plants...
...Studs Terkel, Working (New York: Avon, 1972), p. 4 . 28...
...But increasing imports in the 1960s made steel producers far more determined to hold the line on wages and/or tie any wage increase to productivity hikes...
...Business Week, September 19, 1977...
...8 Thus, at least as far as Japanese steel is concerned, the two main legs of the dumping argument seem to have been knocked from under it...
...But another factor did challenge the industry's ability to collude on pricing: the introduction of a new competitor, foreign steel...
...19 We can be fairly sure that what U.S...
...steel producers have been lagging, and where Japanese producers shine...
...government served as a particularly important catalyst in spurring the monopolization of the industry...
...the BOF needs only 45 minutes...
...4 2 Japanese steelmakers, on the other hand, began a major expansion program after most major technological advances had come on stream...
...319-332...
...8. Council on Wage, and Price Stability, Report to the President on Prices and Costs in the United States Steel Industry (Washington, D.C.: Government Printing Office, 1977), pp...
...AISI, Annual Statistical Reports...
...More than one congressional committee, would later take exception to these arguments, finding instead that the intent to monopolize and eliminate competition was, in fact, the apple of the financiers' eye...
...4 and 5, 1957 (Washington, D.C.: U.S...
...As with pricing policy, relations between mill owners and steelworkers underwent a significant change in the late 1950s and early 1960s...
...19, 41...
...Rebecca Harding, Life in the Iron Mills...
...Capital expenditures per worker dropped at an annual rate of 6.3% between 1966-1972 and BLS data suggest that, given a sharp rise in general machinery and equipment prices, real capital outlays in steel are going down...
...For example, an open hearth furnace requires 9-10 hours to process a "heat" (load) of steel...
...141-156...
...It is precisely in this area that U.S...
...The most important recent advance in the field of shaping is a process known as "continuous casting...
...Revised Edition (New York: Macmillan, 1954), pp...
...It is produced by one of two basic methods...
...See, for example, Walter Adams and Joel Dirlam, "Big Steel, Invention and Innovation," Quarterly Journal of Economics (May 1966), pp...
...cit., IV, Chapter 41...
...4 This single purchase allowed Big Steel to more than double its total capacity in the Pacific coast and mountain states...
...2 8 An incredible decline, to say the least...
...See, for example, Forbes, January 8, 1979...
...Perasky, "Appendix 'A' To Plaintiffs 'Trial Memorandum on Hearing for Preliminary Injunction: Economic Consequences on Steel Workers of Strikes and the Right to Strike in the Basic Steel Industry (1949-1970)," mimeographed, 1976...
...These repairs, along with the chronic short delays, made for several months of substandard production...
...United States Senate, Administered Prices: Part III - Steel...
...Between the end of World War II and 1959, productivity in steel lagged seriously behind the average level for industry as a whole, increasing by an average of only 1.1% per year...
...This is increasingly true if steel wage costs in the United States continue to rise as rapidly as they have in the past . . The only effective solution is less disparity between the labor cost of steel production in the United States and abroad...
...147-60...
...3. Ibid., pp...
...The Secret of Japan's Export Prowess," Fortune 17, The studies are from Chase Econometrics Associates, cited in Iron Age, May 22, 1978, p. 111...
...WAGES, PRODUCTIVITY AND THE STEELWORKERS Steelmakers have not always argued that their costs were less than foreign producers...
...A similar contrast holds in the case of continuous casting...
...de Chazeau and S.S...
...In the majority of cases," writes a Canadian expert, "large establishments, or even major steel producing countries, have not featured as prominently as you might expect in conceiving and originating significant new technology or in anticipating and reacting in a positive way to changing world conditions...
...Bureau of Labor Statistics, Productivity Indexes for Selected Industries, 1977, Bulletin 1983 (Washington, D.C.: Government Printing Office, 1977), pp...
...6 THE PRICE IS RIGHT The monopolization of the steel industry increased its ability to set prices without regard to the golden law of supply and demand...
...Iron Age, May 22, 1978 andJune 5, 1978...
...Steel Industry: The Development of Continuous Casting," Western Economic Journal (March 1973), pp...
...producers lagged seriously behind the Japanese in terms of installing new technology which could lower the costs of steel production...
...Accustomed to monopoly control, protected markets and administered prices, domestic producers have watched their most perfect of all worlds slowly crumble as foreign producers enter their competitive ring...
...Steel and Bethlehem, control nearly 40% of output...
...There was no need to force a group of reluctant competitors into a cooperative arrangement...
...What can be said is that since 1959, USWA leaders have taken the threat of imported steel to mean that a "community of interests" must be established between labor and capital in the steel industry...
...SupJan/Feb 1979 56 NCARpr porters of the steel pricing system (known as "base point pricing") argue that the system provided price stability which prevented prices from rising rapidly in times of high demand...
...When the contract came up in 1959, management planned, in the words of the industry journal, Iron Age, "to make up quickly what had been bargained away in the past...
...1977...
...The next question to ask is: Why are costs so much lower in Japan...
...cit., p. 115...
...4 0 Moreover, the cost of adding new capacity has skyrocketed...
...18-9...
...Congressional Record...
...News & Wobrld Report, October 24, 1977...
...22 Yet the owners' attempt to link USWA wage demands with a threatened increase in imports (which would cost steelworkers their jobs) did not get off the ground...
...New York Times,January 5, 1979...
...steelmakers have been slow to place in production steelmaking advances...
...its rivals followed, fully realizing that cooperation was more profitable than competition...
...Steel scrambled to snatch up all available coal mines and iron ore deposits, a business panic in 1907 had reinserted price competition into the industry...
...Two further purchases of government mills in Gary, Indiana, gave U.S...
...cit., p. 128...
...3 7 This takes on an added importance as shipping costs continue to rise relative to the cost of raw materials...
...Steelmaking is an extremely capitalintensive industry, about 2 V2 times the manufacturing average...
...CONCENTRATION AND COMPETITION 1. Harriette Arnow, The Dollmaker (New York: Avon Books, 1954) pp...
...In fact, since 1953, domestic steel firms have built only two new integrated plants...
...The Steelworkers' refusal to link wage increases to greater output is reflected in the industry's productivity indexes...
...Thirty-five percent of Japanese output was continuously cast in 1977 compared to 10.5% in the United States...
...1976...
...Through the War Assets Administration, the government spent $770 million to build the steel plants it needed to execute World War II...
...354-5...
...Steel some playmates of its own size, they also produced a severely monopolized industry...
...Furthermore, particularly in the early 1960s, productivity began to rise in the industry, as the result of speed-ups and other means of intensifying the work process...
...Steel for $40 million...
...6. Iron Age, April 24, 1978...
...10JanlFeb 1979 11 and the rest in electric arc furnaces...
...cit., p. 8. 38...
...The vast majority of these plants were sold at a fraction of their cost...
...STEEL INDUSTRY As steelmills faced one of their worst slumps on record in 1977, legislators from the steelmaking state of Ohio argued that, It is imperative that the administration and the Congress understand that it is not better techSource: American Iron and Steel Institute, Annual Statistical Reports NACLA Report 6Janl~e 19797 nology and lower production costs responsible for high steel imports at unrealistically low prices, but the deliberate and planned use by foreign governments of the American steel market to gain economic advantage...
...producers had in mind was not to raise wages abroad, but rather to lower them in the United States...
...FTC, op...
...Yet their success was also tied to the companies' ability to pay higher wages...
...To that end, the USWA has not led a single national strike in basic steel since 1959...
...COWPS, op...
...Bureau of Labor Statistics, Bulletin 1856, pp...
...Baumann, "The Relative Competitiveness of the Canadian and U.S...
...It allows molten steel to be poured directly into a caster where it solidifies as it moves, emerging as a solid semifinished slab, billet or bloom...
...steel plants are less productive and more costly than Japanese plants because they were built earlier, before many steelmaking innovations came on the scene...
...Stratton, The Economics of the Iron and Steel Industry (New York: McGraw-Hill), 1937...
...The "hot-metal" method requires prior production of high grade molten iron (or "pig iron") by firing iron ore, sinter, pellets or "briquettes" with coke (a high temperature coal) in a blast furnace...
...Today, only eight firms produce approximately 95% of all steel in the United States (while the top two companies, U.S...
...Some Case Studies...
...16 Who are we to believe...
...7 In other words, it costs Japanese producers approximately $78-133 less for each ton of steel they produce...
Vol. 13 • January 1979 • No. 1
