Friday, June 06, 2014

Steel then, steel now

There was a time no news would be bigger than this in Pittsburgh. It is remarkable that the news coverage of the potential closing of US Steel's Tubular works in McKeesport included this quote from the mayor of McKeesport describing the impact:  'Mr. Cherepko said, "it's a minimal hit, it's a minimal loss."'

That short quote encapsulates a generation of economic change in Pittsburgh better than 50 powerpoint slides I often use. For an elected official in the Mon Valley to be saying that.... I really had to read it twice.

The closing is blamed on imports, which apparently are taking market share even for the tubular products needed locally in shale development here.The pipeline infrastructure construction to support the new natgas development is going to be going on for some time into the future, so the issue of where pipes will be sourced is going to be a factor here, large or small.

American steel manufacturers have actually been waging a war against imports since the 1960s.  Today it again seems to be an argument focused on imports from Asia, but it that has not always been the case. More recently, a little more than a decade ago the US imposed tariffs on steel from European Union countries for much the same reason, arguing European steel producers were selling at an unfair discount to US Producers.  Back then there was a curious sidebar. When the EU proposed a set of counterveiling tariffs against the US, one of the targeted industries was 'nuclear power plant parts.'  Why you might wonder. The best guess is that the analysis showing what regions that might benefit from the US tariffs included Pittsburgh, and the list of industries that were mostly concentrated here was indeed the nuclear industry.  What the EU folks might have missed was that the bulk of the commercial nuclear industry here, in the form of Westinghouse, was actually owned by a British firm at the time (British Nuclear Fuels Inc or BNFL). So they were essentially going to counterveil against themselves.  The brewing trade war at the time was eventually averted when President GHW Bush lifted the original American tariffs on steel in 2003. We will see how this all plays out this time around.

Still, the hit on jobs at Tube City is on top of what I pointed out earlier in the week and some moderate and seemingly permanent job losses at some other manufacturing sites in the region. Losses that included 130 jobs making cookies, and an identical 130 jobs making nuclear waste storage containers. Individually those numbers are not the biggest, but given they are all news items from the last couple of weeks, the losses add up.


Anonymous Anonymous said...

But I thought Drilling Was Just the Beginning???

Monday, June 09, 2014 9:19:00 AM  

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