Columnist Robert Novak has ties to Anti-Kerry book

Incompetent outsider question: Was the US steel industry ever competitive? From reading Alexander Hamilton's "Report on Manufacturers" I gather that it depended on subsidies and protectionism when he wrote it in 1791. The industry has been dependent on them pretty much all of my lifetime. Was it ever in much better shape in between? And even if it was, doesn't history suggest that there are deeper problems at work here than employer-employee relations?

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Why dident I find a better job. I worked at this steelmill for 42 years and for the first 22 years both the steelmill and I made a very good living. I was a maintanence man, an electrician to be exact. The mill had been in business for 90 years when it went under. For all but the last 20 years it made money. You say you were a steelman. I find this hard to believe however if you dont know that shop stewards had to work 40 hrs a week just like everyone else. Our shop stewards had to get company permission to go to a employee, company dispute. If the company man wouldent let the shop steward go one had to find another to help them and this happened quite often. The only time our company had a near strike was when a shop steward was fired for doing his job which was protecting the contractual rights of a union man. The company backed down and reinstated the shopsteward but I know of many that were picked on because they were shopstewards. A forman can assign some nasty jobs to people he dosent like at times if he isent too obvious about it. I made fair money for 25 years but the last 10 years I worked there were hell. But by that time I had too much time on the job to move to another. 5 years after I retired the company went under along with my health protection and lifeinsurance. Luckly I kept my retirement through a government program. Who owned the company? The banks owned it because by this time enough money had been borrowed that the banks had controll of it along with a canadian company. The board of directors assigned the CEO and let him do whatever he wanted to do with the company. I never understood why this was so untill the company went under than found the courts let the banks recover the largest share of the money that went for the payment of the company. This is business in action. The business men involved got all the money and the 3000 union employees retirement is being paid by you and me through the government. If you wonder why I hate big business reread this post.

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Thomas wrote:

Incompetent outsider question: Was the US steel industry ever competitive? From reading Alexander Hamilton's "Report on Manufacturers" I gather that it depended on subsidies and protectionism when he wrote it in 1791. The industry has been dependent on them pretty much all of my lifetime. Was it ever in much better shape in between? And even if it was, doesn't history suggest that there are deeper problems at work here than employer-employee relations?

I don't know. However I do believe that in the days of Carnegie & co. our steel industry was very efficient. Transportation cost then gave local manufacturing a great advantage. From 1920 until soon after WWII we were, by a very wide margin, the world's leading producer of steel. We benefitted from ample supplies of good ore and high quality coal for most of this period, so there is good reason to believe we were (or should have been) competitive.

After WWII neither the U.S. nor Europe could long compete with lower cost manufacturers in Brazil, Korea and other places. Moreover environmental laws added to our collective disadvantage (few industrial processes are dirtier than coke production from coal - and European brown coal is much more laden with sulfurous compounds and has a lower heating value than ours.)

My experience with the Steelworkers Union came from a Nuclear Weapons manufacturing plant (Rocky Flats CO.) which My company managed and operated. The Steelworkers just owned the local union franchise. It was a very interesting experience.

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Now Georgeob, meself being a lifelong resident of Colorado I don't think you really want to being up Rocky Flats.

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Well Dys I ran it after Rockwell and EG&G, from 1995 thru 1997. We did a good job and cleaned the place up.

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GeorgeOB1
GeorgeOB1, I tried to find the story about a huge financial bailout to the steel industry paid by the US government (taxpayers) but ran out of time before I found it. So I will try to remember the details that outraged me at the time these events were happening.

About the same time as New York City was broke and about to go under until finally bailed out by the US government, the US steel industry was in similar circumstances. I recall that the President essentially told New York to drop dead.

The government could not afford to lose its steel plants, mostly for military defense reasons and eventually gave the steel industry 30 million (if I recall correctly, it may have been more) to bring their manufacturing plants and technology up to date, which was the stated reason the industry asked for the money and the government agreed to the deal.

Now what do you think the rascal steel company owners did with the money? Did they keep their word and modernize their plants? No! Instead, they spent the money buying out as many steel company competitors as possible. The result was that they had more obsolete technology plants than before, which meant they could not compete with Asian and European steel plants that were built after the old ones were destroyed during WWII. These new plants used modern technology, which made old US steel plants non-competitive. It was not until years later that US steel plant owners began to modernize their plants so they could compete with foreign steel.

So don't tell me that the US industry is in trouble because of labor problems. The industry is in trouble because of management problems---and because foreign steel manufacturers dump underpriced steel into the US, causing a loss of competitiveness for US plants.

BBB

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other than living in middletown, ohio, home of armco steel, for 3 years when i was a kid, i don't know diddley about the industry. but;

i do know that at present, if we had to produce armorment and weaponry the same way as in world war II, it would be a very, very bad scene.

corporate greed and outsourcing are killing the american skill of manufacturing.

cheaper is not always better.

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DontTreadonMe
DontTreadonMe, you are so right!

We need a new Teddy Roosevelt to get the giant corporations under control just as he did it to the robber barrons of the 20th century.

BBB

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BumbleBeeBogie wrote:

We need a new Teddy Roosevelt to get the giant corporations under control just as he did it to the robber barrons of the 20th century.

As it happens, I doubt that Teddy Roosevelt's 'getting the giant corporations under control' did more good than harm. But I'm willing to learn if you can back up your assertion with evidence. Do you have any?

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Re: GeorgeOB1

BumbleBeeBoogie wrote:

Now what do you think the rascal steel company owners did with the money? Did they keep their word and modernize their plants? No! Instead, they spent the money buying out as many steel company competitors as possible. The result was that they had more obsolete technology plants than before, which meant they could not compete with Asian and European steel plants that were built after the old ones were destroyed during WWII. These new plants used modern technology, which made old US steel plants non-competitive. It was not until years later that US steel plant owners began to modernize their plants so they could compete with foreign steel.

So don't tell me that the US industry is in trouble because of labor problems. The industry is in trouble because of management problems---and because foreign steel manufacturers dump underpriced steel into the US, causing a loss of competitiveness for US plants.

BBB

What is "underpriced steel"? For that matter what is "dumping"? In both cases the seller finds it to his advantage to sell the product at the "underpriced" or "dumping" rate. Is the seller a fool? I'll concede one could knowingly take a loss to destroy a certain competitor, however, this is a strategy that cannot be consistently and successfully applied unless the operator in question correctly believes he can achieve and maintain an effective monopoly. The modern world permits such outcomes only rarely. Much more likely and common is that cries of "dumping" are used by those who don't or can't compete effectively in seeking government protection or subsidies for their low productivity and inefficient, non-competitive products.

I recall that a major part of the political argument (or rationalization) for the earlier subsidies to the steel industry was, as you say to enable the industry to shrink in an orderly way and facilitate the investment in higher productivity plants. In addition much of it was viewed as compensation to the industry for the effects of environmental laws imposed on them which forced them to operate old design plants in even less efficient ways. Purchasing and shutting down the most inefficient producers was an indispensable part of this process. Money is fungible. How can you accurately claim these companies spent the federal subsidies to buy other inefficient plants? More importantly, how could the industry do otherwise? Someone had to facilitate the demise of out-of-date plants and the removal of effectively dead companies. To my knowledge the only consistently profitable American steel company is NUCOR which specializes in the production of steel through scrap, and which uses very modern, low labor cost plants. Prevailing American labor rates and environmental laws simply do not permit the competitive production of steel in great quantity in this country.

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George
George Rolling Eyes

scroll.

BBB

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If we get into a real war where we need to manufacture tanks, trucks ,cannon, ships, and guns where are we going to get the steel necessary to produce these weapons. Our own steel industry couldent support a full blown war for 6 months. I guess well buy our steel from japan, Germany, and China. But if we happen to be fighting these countries in that war what are the chances that they will sell us anything that would help us. We used to be selfsufficent but we cant even manufacture toys.

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It's due to a lack of innovation in the 60's, 70's and 80's that we got so far behind in the industry. Same thing with the automobile industry; we were being outstripped by other countries.

That, and tax codes that reward businesses for moving employees overseas.

That, and the lack of tarriffs to support American businesses.

Cycloptichorn

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"my country right or wrong. either way i still get rich!"

cannibals...

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Re: George

BumbleBeeBoogie wrote:

George

scroll.

BBB

Translation: I know what my opinions are, and I don't want to confront them with facts and arguments that might refute them. Better shun the bastards who have the nerve to disagree with me, and stick to discussing with those who agree with me.

Correct?

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Quote:

Prevailing American labor rates and environmental laws simply do not permit the competitive production of steel in great quantity in this country.

.... Unless, of course, you enact tarriffs to ensure that the price of steel made in America is competitive with that made overseas in poor conditions.

The problem with the steel industry is the same as with many manufacturing industries; the profit is the bottom line. Human rights, quality of product, whatever, it all takes a backseat to the margins.

And people wonder why we have problems in America... our system of commerce is built upon absolute greed.

Cycloptichorn

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Cycloptichorn wrote:

And people wonder why we have problems in America... our system of commerce is built upon absolute greed.

Interesting point. I wonder which countries of the world, in your opinion, don't have any problems. What are their systems of commerce built upon?

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I believe there are some systems of commerce (notably, in the nordic area) that appeal to both Greed and Generosity; cooperation and competition can go hand in hand if done right. Though these countries have much smaller population bases, and it is difficult for me to tell whether or not something like that would work on a larger scale; my economic theory is a little rusty re: scalability of systems.

Also, I believe that our system of modern marketing and sales has brought about a society that is so concerned with the acquisition of wealth, that it eschews all other considerations. The definition of a corporation as an individual is also a major problem.

That being said, do you consider it possible to have a system built on something OTHER than greed, on the American scale, Thomas?

Cycloptichorn

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Cycloptichorn wrote:

.... Unless, of course, you enact tarriffs to ensure that the price of steel made in America is competitive with that made overseas in poor conditions.

The problem with the steel industry is the same as with many manufacturing industries; the profit is the bottom line. Human rights, quality of product, whatever, it all takes a backseat to the margins.

And people wonder why we have problems in America... our system of commerce is built upon absolute greed.

Cycloptichorn

Of course the tariffs will do several things;

They will raise the price of an important material (steel) for other American manufacturers, thereby making their products less competitive in the international marketplace, thus creating a need for additional tariffs on additional goods, etc.

They will harm the economies of less developed nations which produce the commodity in question at lower cost, and reduce their ability to buy other products which we make. In some cases this will then lead to requests for government-to-government aid and assistance to reduce poverty and disease in the other country.

They will insulate the affected American industry from the effects of competition. Experience teaches us that, instread of spurring greater investment from the owners and energy from the workers, this will merely increase the appetites of both for more protection and less competition. This is definately not the kind of feedback we want in our economic activity.

They (the tariffs) will invite retaliation from other countries and trade organizations on our own exports, thus reducing the incomes of other business owners and eliminating the jobs of other workers.

It is difficult for me to see that anyone benefits from all this.

Greed is a universal motivator of economic activity. One persons greed is anothers "fiar wage".

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Quote:

That being said, do you consider it possible to have a system built on something OTHER than greed, on the American scale, Thomas?

From my reading of European newspapers, and from talking to Scandinavian students I've met in college, I didn't get the impression that their system is motivated by greed much less than yours is.

I also believe that you greatly overestimate the extent of America's economic problems. They may look large to you because the 1990s have raised expectations to a very high level. But I guess that of the 200 countries that exist on this planet, at least 190 would happily trade their problems with yours anytime. "Greed" is a loaded term, but commercial systems based on self-interest do have a much better track record than any of the systems purporting to be grounded on high ideals.

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Columnist Robert Novak has ties to Anti-Kerry book

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