Steel Industry Sets Its Sights
AISI Discusses Technology, Recycling, and Global Competitiveness
New opportunities for the U. S. steel industry will come from advances in high technology, improved recycling capability, and effectiveness in global competition, according to the leading spokesmen of domestic steel companies who addressed sessions of the 98th general meeting of the American Iron & Steel Institute (AISI), held in New York City in late May.
David H. Hoag, president and CEO of LTV Steel, Cleveland, said that steel is still the "manufacturing material of choice" for the automotive industry, as well as a critical material in structural and high-technology applications. "Ford, General Motors, and Chrysler have shelved programs to replace ma or steel body components with plastic, he said.
In 1988, the year of the formation of the Steel Can Recycling Institute, Hoag noted, about 15.1 percent of all steel food and beverage cans were recycled. In 1989, he added, that figure grew to approximately 18 percent and included more than 6 billion cans. The recycling rate for beer and beverage cans alone was in excess of 21 percent in 1989, he pointed out. "We are encouraged by this increase," he said, "and we have great expectations that in the 1990s, we will see the recycling rates for steel containers approach the 66-percent rate that exists for all steel products.
Discussing steel's future technology, Walter F. Williams, chairman and CEO of Bethlehem Steel Corp., Bethlehem, Pennsylvania, stated that despite some contrary opinion, "the coke-oven/blast-furnace/basic-oxygen combination will continue to provide the lion's share of raw steel for a long time, most certainly through the 1990s." Williams detailed some new "intelligent processing" machines, which have decision-making capabilities. He said customers have been demanding new and better steels and discussed "bake-hardenable" sheet, new technologically advanced coated sheet steel, -and electroplated coated sheets such as zinc nickel and zinc iron.
Calling for investment in technology, Joseph F. Toot Jr., president of Timken Co., Canton, Ohio, said that such investment could lead to a doubling of direct labor productivity. It also could mean an increase in energy productivity of 25 to 30 percent, he added. "New technology is vital to gaining precise control of the steelmaking processes," Toot pointed out, "so that our customers' end products can be internationally competitive."
Speaking of global competitiveness, Thomas C. Graham, president of USS, a division of USX Corp., Pittsburgh, said that the government's outsize environmental requirements are decreasing U.S. steel companies' ability to compete in the global market. "The issue is cost effectiveness," he said, noting that the steel industry already has committed $7 billion "to eliminate 90 to 95 percent of our emissions into air and water." The industry, he added, opposes requirements that would "drain our available capital and could cause plant closings and essential job losses."
Graham also discussed the issue of fair trade. The steel industry has been "closely monitoring" the government's efforts to implement voluntary restraint agreements and bilateral consensus agreements, he said, "to prevent subsidies and dumping." He said he opposes any weakening of the General Agreement on Tariffs and Trade or U.S. antidumping and subsidies codes.
The industry's productivity was noted by Herbert Elish, chairman and president of Weirton Steel Corp., Weirton, West Virginia, who said that in 1989 "we were able to produce and ship 84 million tons of steel with an average of 169,000 employees." In 1980, the same 84 million tons were shipped by 399,000 employees. Quoting Paine Webber figures, he said the labor cost component for producing steel was down from 40 percent to 33 percent of total costs.
The steel officials, in their talks, generally agreed that imports were down, customer inventories were not large, and there will be more stability in steel in the future.
AISI reported that the domestic steel industry consumed 52.2 million tons of scrap in the manufacture of raw materials in 1989, about 4 million tons below consumption levels in 1988.