Sunday, August 12, 2007

We Still Have Steel Here and We Need to Keep It

The discussion about "Steely McBeam," the Steelers' new mascot, has resurrected the long-standing debate about how the Pittsburgh Region should be portraying itself to the world. In radio interviews, local marketing experts and technology executives have expressed concern about whether it's a good idea for a "former steel town" to have a mascot representing the steel industry, since the steel industry "is gone" and our region now is "focused on services."

Those who think the steel industry is "gone" might do well to get in their cars and drive through the Mon Valley, the Allegheny Valley, the Beaver Valley, and into Butler and Washington Counties where they could see the more than 7,000 people who still work in steel mills in the Pittsburgh Region.

In fact, there are more people working in steel mills in the Pittsburgh Region than in any of the other largest metro regions in the country.

If you think that the mills here are merely the last vestiges of an old industry that's slowly leaving, you're wrong.

U.S. Steel's Mon Valley Works was named one of the Best Plants in North America by Industry Week in 1996 because of the worker-led quality improvement efforts there. Not one of the best steel plants, mind you, but one of the best manufacturing plants of any kind. And U.S. Steel recently opened a new R&D center at the Waterfront. That's hardly a company that's on its way out.

Allegheny Ludlum, one of the top specialty steel makers in the world, has eight manufacturing plants in five of the ten counties in the Pittsburgh Region (Allegheny, Armstrong, Beaver, Washington, and Westmoreland), plus an R&D Center in Natrona Heights.

Last year, AK Steel announced that it would invest $14 million to expand production capacity at its manufacturing facility in Butler, PA. The facility, which is the largest employer in Butler County, produces electrical and stainless steels and has the largest Argon-Oxygen Decarburization (AOD) unit in the world.

And those are just some of the facilities in the part of the Pittsburgh Region that's in Pennsylvania. Go across the border to places like Weirton and Wheeling, and you'll find another more than 6,000 people working in additional steel mills. And some of those workers live in Pennsylvania.

The 7,000+ steel mill jobs in our region pay an average annual wage of over $67,000. That's nearly a half-billion dollar contribution to the region's economy.

The thousands of people who are working in the mills are just the tip of the iceberg. We have over 14,000 people working in primary metal manufacturing (including the 7,000 working in the mills), which is again more than in any of the top 40 regions in the country. And studies done by Frank Giarratani and his colleagues at the University of Pittsburgh have shown that we have a large and successful cluster of businesses that serve as suppliers to the steel industry, not just here, but around the world. They estimated that in 2003, the steel supplier industry employed over 12,000 people in our region at an average annual wage of nearly $57,000.

Instead of trying to avoid references to the steel industry, we should be proud of the fact that we still have a vibrant steel industry. There's no reason why we can't be strong in new technologies like life sciences, robotics, and information technology and in more traditional industries like steel and chemicals. Indeed, one of our unique strengths as a region is that we have a strong specialty materials industry, a strong IT industry, and a strong life sciences industry. One of the keys to many new medical devices is specialty materials, and we have the research and manufacturing capacity to develop those kinds of products.

We can't and shouldn't take the steel industry for granted, because it is at risk. In fact, state legislation passed this summer to allow long-term electricity contracts for industry was specifically designed to reduce a major competitive threat our steel plants are facing from states like Kentucky that offer subsidized electricity rates.

Can you imagine the impact on our economy if we lost 7,000 jobs paying a nearly $70,000 wage? Keeping the steel industry competitive and growing needs to be a priority for regional economic development.


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