Steel Industry

Youngstown Ohio was once a booming steel production city located in Mahoning County just west of the Pennsylvania border. Many young adults who were raised in or around Youngstown can remember hearing about “the good old days” or back when “the mills were up and running. ” It was a much different town then. Basically every family from Youngstown had at least one family member who worked in one of the local mills. The local economy was striving, good jobs were readily available, and there was a certain amount of pride about this town. This is the complete opposite of what young adults in Youngstown see and feel today.

Since the mills closed in the late 70’s and early 80’s Youngstown has never been quite the same. Anyone who drives down I-680 can see the remains of all the Industrial buildings that now look like the ruins of an abandoned city. The citizens of Youngstown have been looking for some type of an economic boost since the closing of the mills. It was thought by many that the days of being known as the “steel valley” were long gone; however, it looks as if there is a chance at redemption for Youngstown to become a striving steel industry once again.

Youngstown was once known as one of the largest steel cities in America. Steel mills ran along the Mahoning Valley for over 25 miles along the banks of the Mahoning River. Now all of these mills are abandoned industrial buildings that have been disintegrating over the past 30 years. The steel mills in Youngstown employed roughly 10,000 people in the late 1970’s (Wypijewski 1). Youngstown steel producers started to take large hits due to foreign steel producers flooding the market with cut rate steel.

This process would later become known as “dumping. ” Problems with foreign steel producers did not happen overnight. In the article “Soviet Steel Supremacy? ”, it was stated that; in 1958, Alfred S. Glossbrenner, President of Youngstown Sheet and Tube, brought this issue to the light. He spoke at a Cleveland meeting of the American Iron and Steel Institute, he stated that the Soviets steel production had tripled over the last 10 years. He also stated that they would match the US in steel production that year (2).

The point that Glossbrenner was trying to make was that once foreign steel producers were able to satisfy their own demand for steel that they would then begin flooding our market. Glossbrenner was right about foreign steel producers. The demand for steel declined over the years due to the fact that foreign companies were selling their steel at prices that were lower than U. S. companies could produce it for. This eventually forced companies like Youngstown Sheet and Tube into bankruptcy. Youngstown’s industrial steel industry eventually took its final breath in late 1979.

There were other problems with Youngstown’s steel industry during the late 70’s. Jules Backman, an economics professor at the New York University, wrote about these problems in his article titled The Steel Industry: Problems and Solutions. Backman stated, that steel producers needed more freedom to solve their own problems. For starters, one major issue was political attacks on price increases. He stated that every time there was hike in prices due to some type of political influence that dumping in the market occurred.

He also felt that smaller companies should be aloud and encouraged to merge together in order to become more efficient and productive businesses (10). Backman later stated that labor costs were a major problem and one of the hardest issues to solve (11). Another huge problem with the U. S. steel industry, especially in Youngstown, was that anti-pollution investments need to be written off quickly. It took some companies several years to recover from the cost of these investments (11). Modernizing companies with new technology every so often set companies back and also took them years to recover from.

After stating some of the problems with U. S. steel production, Backman then stated the largest problem with the U. S. steel industry. That was the issue of foreign companies dumping cut rate steel into the U. S. markets at below cost prices. Backman stated that it was extremely difficult to prove that foreign companies were dumping steel into the U. S. market. The data that was needed to prove dumping was almost impossible to get during those times. Dumping was one of the major factors contributing to the fall of Youngstown’s steel industry.

It forced many of this areas steel manufactures to file bankruptcy. Over the years it has become much easier to obtain the data needed to prove dumping. Now that dumping could be proved, it was time for the International Trade Commission to do something about it. In 2009 it was rumored that there may be a new tariff on steel pipe that was being imported from China and other countries. Later that year the U. S. International Trade Commission imposed a tariff on steel pipes that are typically used in the oil and gas industries (Alcorn 1).

This specific type of steel pipe is referred to as oil country tubular goods. In September of 2009, President Barack Obama announced that he would be enforcing “Section 421” and that it would protect American companies from the flooding of foreign markets (2). This tariff would be one of the best things to happen for Youngstown economy for quite sometime due to a new demand for these goods. There is now a high demand for these types of tubular goods due to the Marcella and Utica shale oil and gas boom that is now taking place all over the Mahoning Valley.

This September there was a Shale Expo at Youngstown’s Covelli Center that brought oil and gas companies from all over the world (Cocklin 1). When asked why there was a need for this type of convention in Youngstown by The Vindicator, Tony Paglia, chamber spokesman stated that their “focus (is) on bringing local and global businesses together to make progress in further establishing places such as Youngstown as a hub for natural-gas activity” (qtd. in Cocklin 1). The shale industry is expected to continue growing all over the country.

Larry Woods told The Vindicator that, "By all means, we expect this to just get bigger here" (Cocklin 1). The shale boom is crucial to Youngstown as a steel industry for one major reason. It has created a high demand for oil country tubular goods which just so happen to be made in Youngstown. Now with the new steel tariff enforced local companies are safeguarded and have a chance at becoming a striving leader in the steel industry once again When the issue of the new tariff was brought to the attention of U. S. Rep Tim Ryan (D-Youngstown), he stated that, “China has been dumping products in the United States for years.

This is just leveling out the playing field” (qtd in Alcorn 1). Benjamin Liebman, a scholar from St. Josephs University, stated in his report Safeguards, China, and the Price of Steel, that the Chinese dumping steel in the US market has effected the US steel industries for over three decades (370). Shortly after the tariff on foreign tubular steel passed, former governor Ted Strickland said it best: “With our states strong history of steel production, Ohioans and Ohio businesses deserve the chance to compete fairly and work to regain lost jobs in the steel industry” ( Alcorn 2).

Now with this new tariff foreign steel producers can no longer dump their products in the U. S. market. This made decision making much easier for one of the valley’s local steel producers. V&M Star decided to pull the trigger on a $1 billion expansion project for its Youngstown mill (Alcorn 1). V&M Star and Wheatland Tube are two of the Mahoning Valley’s largest steel producers still in existence, and oil country tubular goods production is a majority of their business (Alcorn 1). Earlier this year V&M Star announced that it is on track with construction.

Construction is expected to be finished up by the end of summer. It also stated that it would need a few hundred new workers to keep up with the high demand of oil country tubular goods. A V&M Star employee, Michael DuPonty, stated that “They are doing everything they possibly can to get the new addition of the plant open on time, but it is now looking to be finished late this year. ” DuPonty started at V&M shortly after the steel tariff was signed in 2010. He has promoted to an operator after being with the company for only nine short months.

When asked how V&M Star was helping the Youngstown area, DuPonty responded by saying, “This company is doing great things for this area, they are looking to hire as many as 500 more workers by the end of the year, and there is definitely potential for advancement. ” DuPonty also stated that there are rumors of another expansion project in the future. The company is considering adding a billet manufacturing department to the already existing mill. If V&M Star adds a billet manufacturing department there is no telling how many more jobs it could produce for the Mahoning Valley.

V&M Star is about to become one of the largest producers of oil country tubular goods in the country, and it just so happen to be located in what was once known as “steel valley. ” Youngstown is starting to make a comeback in the steel industry and this is just the beginning. Many people from Youngstown feel that the city would never bounce back from the closing of the steel mills in 1979. Jules Backman stated several different reasons why steel mills, like those in Youngstown, failed in the late 70’s. He also stated that foreign countries dumping steel into the U.

S. market was the number one reason for the closing of the mills. The tariff on imported goods that was included in Section 421 has put this issue to rest. U. S. companies can now manufacture products made in America that are needed in America without having to worry about being undercut by the foreign competition. The shale gas oil and gas boom that has been sweeping the nation has made a high demand for oil country tubular goods. Due to the high demand of these goods, V&M star decided to expand its factory in order to meet these demands.

Upon completion later this year, V&M Star will be one of the largest producers of oil country tubular goods in the country. The expansion has already created hundreds of jobs for people in this area and there is no telling how many more will come. This company is going to put Youngstown back on the map as a striving steel producing city once again. Those who felt that Youngstown could never recover from the closing of the mills and become a striving steel industry again were wrong. The days of Youngstown producing industrial steel are over and most likely will never return.

Youngstown had to learn how to adapt after the closing of the mills. Now there is a new type of steel needed in this country. That steel is known as oil country tubular goods and it is the future for this steel city. Works Cited Alcorn, William K. "Steel pipe tariffs forge optimism for V&M expansion in Youngstown, Ohio. " The (Youngstown) Vindicator. 31 Dec. 2009: Web. 17 Sept. 2012. Backman, Jules. "The Steel Industry: Problems and Solutions. " Challenge (05775132) 21. 3 (1978): 7. Business Source Complete. Web. 9 Oct. 2012.

Cocklin, Jamison. "Shale expo rivals large events. " The (Youngstown) Vindicator 07 Sept. 2012: Web. 9 Oct. 2012. DuPonty, Michael A. Personal interview. 14 Sept. 2012. Liebman, Benjamin H. "Safeguards, China, and The Price Of Steel. " Review of World Economics 142. 2 (2006): 354-373. Business Source Complete. Web. 9 Oct. 2012. "Soviet Steel Supremacy? " Time 72. 15 (1958): 98. Academic Search Premier. Web. 17 Sept. 2012. Wypijewski, JoAnn. "Whose Steel? " Nation 275. 3 (2002): 16-22. Academic Search Premier. Web. 17 Sept. 2012.