Ohio Steel Industry Advisory Council
Summer 1995
Legislative
Lookout
Ohio exports
Property taxes
Recycling environment
Speaking out
Steel Front sidebars
Steel at Work
Steel futures
US-Japan trade agreement
Capital investments boosted Steelmakers
Call for
End to Tax on Inventories Ohio's
personal property tax on inventory discourages investment and makes the
Buckeye State significantly less competitive with neighboring states on
tax matters, steel officials say. Charles
Hesse, representing the Ohio Steel Industry Advisory Commission and LTV
Steel Company, Cleveland, recently told an Ohio House panel that LTV's
personal property tax per ton of steel inventory is almost 50 percent
higher in Ohio than in Indiana. For a year's worth of shipments, the difference
amounts to over $1 million, Hesse said. Meanwhile,
LTV's operations in nearby Michigan, Pennsylvania and Illinois incur no
personal property tax on inventory. "The
comparison is startling, and it doesn't matter whether the inventory is
at a steel plant in Cleveland, Lorain, Massillon, Middletown, Warren or
Steubenville," Hesse said. "It's a burden that should be removed." Like
many other manufacturers and industry groups, Ohio steelmakers say this
tax places a disproportionate burden on capital-intensive companies, which
must maintain inventories to provide just-in-time deliveries for their
customers. Further, in times of little or no profit, idle inventories
are taxed when manufacturers can least afford it. House
Bill 168, authored by State Rep. Richard Hodges of Metamora, would cut
the personal property tax by reducing the listing percentage on inventory
from 25 percent to 15 percent over 10 years. Following hearings last spring
before the House Ways and Means Committee, the bill may have additional
hearings this fall. The legislation
was introduced after a task force appointed by Gov. George V. Voinovich
held hearings and solicited input last year on Ohio's entire tax structure.
As part of that process, the Steel Commission developed a report that
gauged the impact of personal property taxes on Ohio steelmakers. Also
backing House Bill 168 in recent hearings was Allan Thompson, chairman
of the Ohio Manufacturers Association's taxation committee and a state
and local tax specialist for The Timken Company, Canton. Thompson said
lower taxes would contribute to the momentum Ohio manufacturers and their
workers have built by increasing their own competitiveness. "The
increased productivity Ohio manufacturers enjoy today will not last unless
we all work to continually improve the competitive environment of our
state," Thompson said.
[back to top] Steel
Boosts Ohio Exports A. Cole
Tremain, vice president of industrial relations and public affairs at
LTV Steel Company (left), receives an "E" award from Ohio Gov. George
V. Voinovich in recognition of the steelmaker's exporting excellence.
LTV, with operations in Cleveland, Youngstown, Warren and Elyria, was
one of 35 Ohio companies saluted by the Ohio Department of Development
for their international business efforts. World Trade magazine recently
ranked the Buckeye State tops in the nation in exporting.
[back to top] Personal
Property Taxes at a Glance The effect
of the tax across five states: State
Tax/Ton of Inventory Ohio
$1.15 Indiana
.77 Illinois
.00 Michigan
.00 Pennsylvania
.00 Source:
LTV Steel Company
[back to top] Ohio
Event Promotes
Recycling, Environment The Ohio
Steel Industry Advisory Commission was one of more than 90 organizations
and businesses that participated in the first-ever EnviroFest in Canton.
Sponsored by the Timken Foundation, the three-day event showcased practical
solutions to area problems of recycling, waste reduction and reuse of
resources. More than 800 educators and business people attended the event
at Stark Technical College.
[back to top] Speaking
Out Are
you looking for specific information on the Ohio steel industry? Or just
wonder how steel is made? The Ohio Steel Industry Advisory Commission
is available as an expert resource, with information on national and local
stories, issues and legislation. Our steel library covers steel-related
topics with extensive news articles and position papers. To receive more
information or a copy of our Ohio Steel brochure, past newsletters, video
or annual reports, call the Ohio Steel Information Line at 1-800-OHIOSTL
(644-6785).
[back to top] Steel
Front Sidebars Reflecting
steel's growing popularity as a construction material, Wheeling-Pittsburgh
Steel Corp. has announced plans to acquire Namasco Inc.'s building products
division, which makes corrugated steel roofing, siding and accessories.
The transaction is the latest of several building-related acquisitions
by Wheeling-Pittsburgh. USS/KOBE
Steel, Lorain, recently completed a modernization of its 10-inch bar mill.
The new small bar mill is designed to supply makers of fasteners, automotive
components, tire cord and other products. The $70 million mill went on-line
in July. The Timken
Company, Canton, recently celebrated the 10-year anniversary of its Faircrest
Steel Plant in Canton. Faircrest was the first new U.S. alloy steel producing
plant built after World War II. Today, it employs approximately 500 people. Republic
Engineered Steels, Inc., Massillon, recently completed an initial public
offering of its common stock. Republic, which had been wholly owned by
its employees, is now 60 percent owned by employees. Republic's stock
trades on the NASDAQ National Market System under the symbol REPS. David
Hoag, president and chief executive officer of LTV Steel Company, has
been awarded the American Iron and Steel Institute's highest honor, the
Gary Memorial Medal. Hoag is a former chairman of the AISI. WCI Steel,
Inc., Warren, was awarded ISO 9002 registration in May by Steel Related
Industries, an accredited registrar. Wheeling-Pittsburgh
Steel Corp. recently completed a $54 million rebuild of its blast furnace
in Mingo Junction. Along with significant cost benefits, the project increased
productivity and added pollution control equipment. AK Steel,
Middletown, has just completed a $60 million improvement to its electrogalvanizing
line. The improvements will lower costs, increase manufacturing flexibility,
shorten lead times, enhance delivery performance and raise productivity. WCI Steel
Inc. has announced plans to install a $3.5 million high-temperature hydrogen
anneal facility. The unit is aimed at improving the quality of WCI's silicon
steel.
[back to top] U.S.-Japan
Trade Pact
Bodes Well for Steelmakers Ohio
steel producers expect the recently signed automotive trade agreement
between the United States and Japan to enhance their competitiveness as
auto industry suppliers. The agreement,
signed in August, removes barriers to sales of U.S.-made vehicles and
vehicle parts in Japan. In conjunction with the agreement, Japanese automakers
projected a sharp increase in their U.S. production, which should drive
up the need for supplies from American companies. "This
presents a major opportunity for automakers and auto parts suppliers,
both of which consume huge quantities of steel," points out Mark Essig,
executive vice president-commercial at AK Steel Corp., Middletown. Added
Patrick Tatom, vice president of sales at WCI Steel, Inc., Warren, "If
both the United States and Japan live up to their promises, steel producers
should be among the winners in this agreement." Ohio
steel producers supply material and technical support for hundreds of
automotive parts, including hoods, doors, fenders, bumpers, wheel covers,
gas tanks and driveshafts. The move
toward enhanced safety in cars has led to an increasing use of steel in
U.S.-built cars and trucks. The U.S.-Japan
auto trade agreement ends decades of friction between the two countries
on the subject of auto sales. The American Iron and Steel Institute and
the nation's Big Three automakers have strongly endorsed the pact while
urging its enforcement.
[back to top] Steel
Futures Program Promotes
Ohio's Investment in Steel Industry Ohio's
Steel Futures Program, created in 1988, has helped approximately 150 steel-related
companies expand in the Buckeye State or relocate their operations here,
the Ohio Department of Development reports. And the state legislature
recently approved a record $3.5 million for the current biennium. The program,
aimed at creating and retaining jobs in Ohio, makes direct grants available
for significant plant modernizations, research and development projects,
employee training and waste reduction. In the
past two years, some of Ohio's most prominent industrial expansions have
benefited from Steel Futures: - North Star Steel
Co. and BHP Steel, which are building a $400 million minimill in Delta,
will receive a $1 million grant for off-site infrastructure improvements.
- Worthington Industries,
which is building a $65 million steel processing plant near the North
Star mill, will receive $500,000 for off-site infrastructure improvements.
- Ohio Coatings Co.,
a joint venture between Wheeling-Pittsburgh Steel Corp. and partners
from Japan and South Korea, will receive $350,000 to help buy new equipment
for its $80 million tin-coating plant in Belmont County.
- Washington Steel
Corp. has a commitment of $250,000 for its $56 million modernization
in Massillon.
- American Steel
& Wire Co. has received $350,000 to assist its $110 million expansion
near Cleveland.
The grants provided
under the program have ranged from $1 million to as low as $5,000. And
while the focus before 1992 was on training projects, state officials
have since then emphasized projects that involve acquisition of modern
equipment. "The most effective
way to help steel companies is to bolster their commitment to reinvest
in technology and machinery that creates and retains jobs," said Donald
Jakeway, director of the Ohio Department of Development. "The last two
years have been banner years for steel in terms of capital reinvestment,
and we're positioned well to provide assistance for these important projects." The Steel Futures
Program also supports the Ohio Steel Industry Advisory Commission, of
which Jakeway is co-chairman.
[back to top] U.S.-Japan
Trade Agreement at a Glance - Japanese government
will send letter to Japanese car dealers affirming their right to sell
foreign vehicles. Japanese
government and car dealers will assign contact person to answer questions
on foreign cars and facilitate relationships between American manufacturers
and Japanese dealers. U.S. carmakers expect to sign 200 more Japanese
dealers in 1996 and 1,000 by the year 2000.
- Japanese government
will ease parts certification process required for garages that repair
cars. U.S. officials expect this to remove barriers to the use of U.S.
aftermarket parts.
- Japanese automakers
released projections to boost U.S. production by 565,000 vehicles by
1998. That is expected to generate $6.75 billion in additional sales
for American suppliers by 1998. Japanese-based carmakers projected they
will buy an additional $2 billion in American-made parts by 1998.
Source:
Office of the U.S. Trade Representative [back
to top] Ohio
Steel Boosts Capital
Investments Sharply in 2nd Quarter Ohio's
steel producers dramatically increased their capital investment and modernization
programs during the second quarter of 1995, according to a report prepared
for the Ohio Steel Industry Advisory Commission.The state's nine primary
steelmakers spent $217.5 million on capital improvements in the April-June
quarter, 2.6 times the outlay in the comparable 1994 period. For the first
six months of 1995, capital investments totaled $398 million - more than
2.7 times that of the first half of last year. "The
industry continues to reinvest heavily in facilities and products that
will maintain our leadership over foreign competitors," said Charles H.
West, co-chairman of Ohio Steel Industry Advisory Commission and president-steel
at The Timken Company, Canton. Shipments
increased 4 percent to 3.87 million tons, including a 72 percent increase
in steel exported from Ohio. First-half shipments were 7 percent higher
than in the previous first half. Exports in the first half were 85 percent
higher than in the first six months of 1994. The number
of Ohioans employed at member companies' Ohio facilities increased 3 percent
to 29,749 in the second quarter and payrolls grew 9 percent, surpassing
$375 million. The impact of increased employment and payrolls translated
into a 9 percent increase in state and local tax payments in the quarter
and 15 percent for the six months. The Ohio
Steel Data Report covers statistics from the Ohio facilities of the Steel
Commission's nine steel company members. These facilities account for
more than 95 percent of the steel produced in Ohio. The report was compiled
by Youngstown State University's Center for Urban Studies.
[back to top] | 
