What happend to the American Steel Industry?

[nick]

Ive always been curious as to what happened to the American Steel Industry.  I live very close to what used to be a very strong and important steel mill.  At its peak Bethlehem Steel (North Point) employeed over 20,000 employees.  Heck they even had a town of their own on the steel mill.  Individual houses and schools for employees only.  Now the mill only employees around 1,000 to 2,000 employees.

Anyway, what is your opinion of the fall of the American Steel Industry?

[Beet]

Is the founder of this industry related to Lt. Governor Michael Steele, by any chance?

[nick]

Is the founder of this industry related to Lt. Governor Michael Steele, by any chance?

Oh sh**t.  I totally spelled that wrong. 

[Emsworth]

The American steel industry peaked in the 1960s, but began declining in the 1970s due to foreign competition. It has never been able to fully recover, mainly because labor is cheaper overseas. During his first term President Bush imposed steel tariffs, but he was forced to have them repealed in 2003.

The tariffs were definitely a bad idea. It is true, they helped steel producing industries. However, because steel prices were higher as a result, steel consuming industries were harmed.

[Sibboleth]

Kind of like what happend to our steel industry; an interesting mix of gross mismanagement at the highest level, increased foreign competition, changing supply and demand patterns (steel production outside coastal areas has suffered especially badly for some fairly obvious reasons), technological changes... and the tendency for people to panic as soon as things start going wrong.

[RomneyGekko Situation Hairgel]

While there was terrible mismangement, I think unions were overbearing as well.  I mean some of these guys were getting HUGE pensions and sometimes 16 weeks of vacation per year.  I am all for unions, but there has to be a limit.  You think North Point is bad, visit Bethlehem, PA.  Driving down 3rd Street in South Bethlehem is one of the most depressing sites you will ever see.  Miles of rust and empty parking space.  Lehigh University is the ONLY thing keeping it going.

[Storebought]

The unionization from the 1940s onward had the perverse effect of increasing wages and prices for American steel products themselves at a time when (1) many of those union jobs were technologically obsolete because of (2) relentless automation of the (rebuilt) mills  in S Korea and Japan, our biggest competitors. But even then, (3) the reduction of the consumption of steel itself, in favor of plastics, aluminum, and composites, has depressed the steel industry the world over.

US Steel is an economic carcass; in comparison, the small, new, efficient mills in North Carolina and TN are in weak but not dire shape.

I would like to know: when will GM finally go out of business? Even their recent campaign of giving their cars away has not attracted new buyers.

Contrast that with Toyota or Honda. They sell their cars and trucks at full freight, with nary a discount to be seen (the ones that we do see are from the dealers themselves), yet they don't seem to share in GM's misery.

[Dave from Michigan]

when will GM go bankrupt  January maybe.  Has anyone been following this Delphi GM's fromer supplier which they spun off in 1999 has filled bankrupcy
they want to pay th workers 10 dollars an hour and make them pay more for healthcare.  Now the union workers and jioning together and  are very very pissed off and may strike when Delphi goes back in Dec I think to void the union contract.   Delphi supplies GM with over 50% of it's supplies.  If they strike it could shut down GM plants in north america is what I've heard.  Most analysis doubt GM can survive that. 

[Dave from Michigan]

Not to mention come 2007 when the whole UAW contract is up of all the automakers there saying things could go very very bad.  Lots of union members feel whatever consessions Delphi gets is what the auto companies will want.  So it looks like there gearing up for a fight if it doesn't happen now it will in 2007.

[??????????]

GM is a joke. They make a garbage product and absolutely deserve to go out of business. A GM product will never sit in my driveway again. And to answer the question : Labor Unions of course. The main reason for the ruin of industrialization in the USA.

[phk]

Technological stagnation coupled with the rise of Japan and the four tigers, Taiwan, South Korea, Singapore, Hong Kong.

[MODU]

Technological stagnation coupled with the rise of Japan and the four tigers, Taiwan, South Korea, Singapore, Hong Kong.

Fairly close.  The steel companies priced themselves out of the market for failing to upgrade their technology while maintaining overpriced labor on the books.  When you combine that with the naturally cheaper price to build large steel-demanding items like ships, cars, trains, etc overseas, the steel producers had to keep inflated prices just to make ends meet.  One of the biggest saviors of the steel industry outside of commercial building construction has been the Navy, supplying the steel industry with constant business as the Navy undergoes 15 years of ship modernization/replacement.

[Dan]

What happended?  The Federal Goverment of The United States, thats what happended.

[Virginian87]

De-regulation, same thing that's killing the legacy airlines.  It makes me sad to see great American industrial icons like Bethlehem Steel, Republic Steel, and Youngstown Sheet and Tube fade into oblivion while the Chinese, Japanese, and European steel industries hum along. 

Another problem was failure of the government to impose stricter regulations to protect American industry.  It's sickening to see Japanese cars take over our highways while Ford, Chrysler, and General Motors products languish.

(sigh) I wish American industry could go back to 1947 and stay that way.

[Sibboleth]

It makes me sad to see great American industrial icons like Bethlehem Steel, Republic Steel, and Youngstown Sheet and Tube fade into oblivion while the Chinese, Japanese, and European steel industries hum along. 

The steel industries in most European countries are far from humming along; over the past few decades there have been big cutbacks and mergers in most countries. One reason why it's still in a better shape than in the U.S is due to various E.U and Government grants/structural funds to some regions.
Over here there was a vicious spate of closures in the early '80's, largely motivated by political concerns rather than economic ones. Some places (like Consett in Co. Durham) have never really recovered and there was some big cutbacks across South Wales a few years ago; the end of what was left of the steel industry in Ebbw Vale was very sad.

[Dave from Michigan]

It's sad to see the steel companies go under, my grandfather was one of the people who ran the Redford, Michigan Bethlehem steel plant. 

[Virginian87]

It makes me sad to see great American industrial icons like Bethlehem Steel, Republic Steel, and Youngstown Sheet and Tube fade into oblivion while the Chinese, Japanese, and European steel industries hum along. 

The steel industries in most European countries are far from humming along; over the past few decades there have been big cutbacks and mergers in most countries. One reason why it's still in a better shape than in the U.S is due to various E.U and Government grants/structural funds to some regions.
Over here there was a vicious spate of closures in the early '80's, largely motivated by political concerns rather than economic ones. Some places (like Consett in Co. Durham) have never really recovered and there was some big cutbacks across South Wales a few years ago; the end of what was left of the steel industry in Ebbw Vale was very sad.

I was thinking of Germany, Poland and Eastern Europe.

[Sibboleth]

I was thinking of Germany, Poland and Eastern Europe.

Did you? That's interesting; I tend to associate the word "Europe" when used in that sort of sense as meaning (basically) the countries in the E.U before the enlargement (o/c Germany is one of those but...)
But, yeah, a lot of steel gets made out in eastern Europe (not sure whether there's been job losses and stuff or not out there. Hmm...). IIRC what's left of Bethlehem Steel is owned by Mittal these days; I guess that counts as ironic.

[Virginian87]

I was thinking of Germany, Poland and Eastern Europe.

Did you? That's interesting; I tend to associate the word "Europe" when used in that sort of sense as meaning (basically) the countries in the E.U before the enlargement (o/c Germany is one of those but...)
But, yeah, a lot of steel gets made out in eastern Europe (not sure whether there's been job losses and stuff or not out there. Hmm...). IIRC what's left of Bethlehem Steel is owned by Mittal these days; I guess that counts as ironic.

Sorry, I should have been more clear.  Yes, that is true.  International Steel purchased the rotting carcass of Bethlehem Steel and in turn became a subsidiary of Mittal.  God, I hate it when foreign companies take over American companies (Case in point: DaimlerChrysler).

[Sibboleth]

Sorry, I should have been more clear.

That's o.k; it's given me a chance to rant about f***ing CORUS closing down plants in South Wales at a time when the prospects for the steel industry actually looked good...

Yes, that is true.  International Steel purchased the rotting carcass of Bethlehem Steel and in turn became a subsidiary of Mittal.

Strange world

God, I hate it when foreign companies take over American companies (Case in point: DaimlerChrysler).

You know, if you replace "American" with "British" and "DaimlerChrysler" with "Austin Rover" then that's very close to my viewpoint...

[Virginian87]

Sorry, I should have been more clear.

That's o.k; it's given me a chance to rant about f***ing CORUS closing down plants in South Wales at a time when the prospects for the steel industry actually looked good...

Yes, that is true.  International Steel purchased the rotting carcass of Bethlehem Steel and in turn became a subsidiary of Mittal.

Strange world

God, I hate it when foreign companies take over American companies (Case in point: DaimlerChrysler).

You know, if you replace "American" with "British" and "DaimlerChrysler" with "Austin Rover" then that's very close to my viewpoint...

How did you guys feel when BMW and Volkswagen took over Rolls-Royce and Bentley?  How about Ford buying up Jaguar and Land Rover?

[Sibboleth]

How did you guys feel when BMW and Volkswagen took over Rolls-Royce and Bentley?  How about Ford buying up Jaguar and Land Rover?

I don't think many people cared that much when the companies that made posh cars were taken over (although some did) but things were very different with Rover... mistrust of BWM over that wasn't helped by the fact that they eventually took the profitable parts of the company (ie; Mini) and let the rest to rot. The sheer amount of anti-German feeling in the West Midlands when BWM pulled the plug a few years ago was actually quite scary.
Right now, most people aren't sure what to think of Nanjing Automotive buying up the scattered remains of MG Rover (if they are genuine it'll just be a few MG's that'll get made anyway. Hopefully they'll use Longbridge, but I'm sceptical about that) but weren't exactly happy with the stuff the Phoenix Consortium and Shanghai Automotive were doing just before the company went belly up.
The company should never had been privatised in the first place IMO... the doom-mongers that said it couldn't survive outside of the public sector were spot on.