Officials: With war, saving U.S. steel industry is crucial

Steel supporters say they're fighting their own war to keep the foundering industry afloat.
By CYNTHIA VINARSKY
and DAVID SKOLNICK
VINDICATOR STAFF WRITERS
Saving the Mahoning Valley's beleaguered steel industry is more crucial now than ever, industry spokesmen and area lawmakers say, as the nation faces the prospect of a protracted battle against terrorism.
"As sad as it is, I think this situation is going to wake up the U.S. to see what's happening to our steel industry," said John Kubilis, president of the union representing 1,375 laid-off steel workers at the CSC Ltd. steel bar mill in Warren.
CSC officials had such a hard time finding domestic steel beams when the company built its new melt shop two years ago, he said, that they almost had to resort to importing beams from Japan.
"There's only one company in the country that can make the steel construction beams that would be needed to rebuild New York City," Kubilis said. "People have to come to some sense of reality. If it's a long war, who would provide the uniforms? Who would provide the equipment for our soldiers?"
Contract talks: Kubilis and other officials of the United Steelworkers of America have been meeting in Pittsburgh, trying to hammer out a revised contract that would make it feasible for a Cleveland investment group to restart the shuttered CSC. He declined to comment on the progress of the talks.
Kubilis said he'll also be among the speakers testifying before the International Trade Commission next month in Gary, Ind. The president of USWA Local 2243 said he'll argue that foreign steel dumping was a factor in CSC's financial troubles, is damaging the domestic steel industry and weakening the nation.
War needs: With the possibility of a long, drawn-out war that will stretch the nation's existing resources, it is vital that state and federal governments do all they can to help the steel industry, said state Rep. Kenneth A. Carano of Austintown, D-65th.
"We are no longer the giant-sized steel-making nation we were, but the need is still there," he said. "We may need these steel manufacturers, especially the specialty steel manufacturers, and we have to get them going again. We're going to need the steel industry now more than ever."
U.S. Rep. James A. Traficant Jr. of Poland, D-17th, has long been a proponent of providing government assistance to the troubled steel industry because in times of crisis, the United States should not be forced to count on foreign steel makers for products, said Charles Straub, the congressman's spokesman.
"The congressman has said that America can't defend itself with Styrofoam," Straub said. "We need domestic steel producers, and the Mahoning Valley plays a significant factor in that. The Bush administration has been taking a serious look at the steel industry's problems. We need to step up immediately and provide some type of assistance to the steel industry such as curbing the flow of foreign steel. These attacks show us we definitely need to be prepared in cases of crisis."
State Sen. Robert F. Hagan of Youngstown, D-33rd, said steel is a vital part of our national security.
"It takes steel to make machines of war and we can't depend on Japan or Korea or South American nations to provide it to us," he said. "I'm worried about this. Steel is vital to our national economy and security and that has never been more evident than now."
Too early to know: The consensus among steel industry experts is that it's too soon to say how the nation's heightened state of defense will affect steelmakers, said Tom Matthews, a spokesman for the Ohio Steel Council. The council is a consortium of steel companies and other industry supporters.
On the positive side, he said, the situation is drawing more attention to the country's increased dependence on foreign steel and the strategic importance of steel, not only for defense, but also for infrastructure.
However, the industry's fight against foreign steel imports could take a back seat to larger issues, Matthews said.
"Another thing to consider is that, while we're asking countries to support us in the fight against terrorism, we could also be going after their steel imports," he said. "That could make steel imports an even greater political issue."
WCI woes: Discounted steel imports and a sluggish economy have resulted in four consecutive losing quarters for WCI Steel in Warren, said spokesman Tim Roberts, and the industry in general lost $1.43 billion just last quarter.
That's why WCI officials are focused more on trade hearings than on the possible business impact of recent terrorist attacks, he said.
WCI president Edward Caine was in Washington, D.C., last week addressing the International Trade Commission, one of several flat-rolled steel representatives who are also arguing for tighter enforcement of existing trade laws.
Gov. Bob Taft also testified in front of the trade commission saying, "I would like to point out that America's entire steel industry is in jeopardy and it would be a grave risk to be entirely dependent on other nations for a commodity that is so essential to our economy and our military capability."
If the commission decides the domestic steel industry has been seriously injured by increased imports it would likely recommend that the president provide some sort of relief.
Roberts said it's "much too early to speculate" on what effect the terrorist attacks will have on the steel industry in general and WCI in particular.
Although some WCI customers probably have had defense contracts, he said, manufacturers would more likely use steel plate to make ships and tanks, rather than flat-rolled steel.
"I'm sure some of our customers have defense contracts, but I can't tell you where or who. It's too early to tell," he said.
McDonald Steel: Competition from cheap foreign steel has always been a factor for McDonald Steel, said spokesman Bill Farragher, so the steel bar and shape producer has learned to adapt by finding ways to stay competitive. "We've had to learn to be leaner and meaner," he said.
McDonald Steel lost money in its fiscal year ending June 30 for the first time in its 20-year history, he said, and responded by going from two shifts to one and laying off some employees.