Ohio Steel Industry Advisory Council
Summer 1996
Legislative
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New members
Steel at Work
On the Steel Front
Steel Front sidebars
Utility agreements
Quarterly report text
Kelly named to committee Commission-Supported
Brownfield
Bill Gets Governor's Approval Ohio
Gov. George V. Voinovich has signed into law a bill that authorizes the
director of the state Department of Development to grant corporation franchise
and individual income tax credits to companies that voluntarily clean
up environmentally contaminated sites. House
Bill 441, effective Aug. 22, was supported by the Ohio Steel Commission
as legislation that signified movement toward providing financial incentives
to redevelop brownfield sites. The bill, part of the governor's Jobs III
program, could bolster opportunities for steel producers to revitalize
some former industrial and commercial sites by easing financial barriers
that hinder redevelopment. "This
legislation is not the ultimate solution to the problem of cleaning up
Ohio's brownfield sites, but it certainly represents yet another step
in the right direction," said James D. Donohoe, associate general counsel
and secretary of Republic Engineered Steels, Inc., and chairman of the
Commission's environmental subcommittee. "The biggest impediment to redeveloping
brownfield sites is the cost of environmental cleanup. House Bill 441
is an effort to address that issue." Meanwhile,
another Commission-supported bill, House Bill 442, has been signed by
the governor. The bill would provide grants to distressed, inner city
and labor-surplus areas for land acquisition, infrastructure improvements
and property renovation. Grants under the pilot program could be used
to defray the cost of cleaning up brownfields. The Commission
said Ohio must focus on creating financial incentives that will enable
companies to work with the state to revitalize these sites and create
more jobs. In other
legislative action, a bill that would protect businesses that voluntarily
disclose and correct instances of environmental non-compliance has been
held for final House review until later this year. Senate Bill 138 was
approved earlier this year by the Senate. Under
current law, companies that conduct self-audits risk penalties from regulators,
who can obtain and use the information in the audits. The bill would protect
those companies from penalties.
[back
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Members Appointed to
Ohio Steel Commission Ohio
Gov. George V. Voinovich has appointed John G. Hritz, vice president,
general counsel and secretary at AK Steel Corp., and the Ohio Board of
Regents has named Dr. William L. Berry, professor of manufacturing management
at The Ohio State University, to the Ohio Steel Commission. Hritz
joined AK Steel in 1989 as counsel in the law department and recently
was named vice president, general counsel and secretary. He previously
was vice president- employee relations and in the past had served as assistant
general counsel for the company. In his new capacity, he will continue
to be responsible for employee relations functions. AK Steel,
a producer of low-carbon, flat-rolled steel for the automotive, appliance,
construction and other markets, employs about 5,700 people and has been
a member company of the Steel Commission since its establishment in 1991. Berry
teaches at the Max M. Fisher College of Business and is director of the
university's Center for Excellence in Manufacturing Management. Before
coming to Ohio State in 1992, he held positions at the University of North
Carolina, Indiana University and Purdue University. His expertise includes
manufacturing strategy, planning and control systems. Berry also is co-author
of several books, including Manufacturing Planning and Control Systems. The Ohio
State University, a Commission member since 1991, is a comprehensive research
university with a strong commitment to undergraduate education, operating
the main campus in Columbus and regional facilities in Lima, Mansfield,
Marion and Newark.
[back
to top] High-Strength
Steel Enables
Railroad Industry to Cut Costs A new
study by a subsidiary of a leading railroad company has found that the
use of high strength low alloy steel in freight cars can reduce unit rail
transportation costs without increasing capital costs. Although
the study by CANAC International focused on the Canadian rail system,
the American Iron and Steel Institute reported that the findings indicate
similar savings can be achieved in the U.S. rail system. The study
found that the high strength low alloy 70-ksi steel in the main structural
components of freight cars reduced tare weight and increased payload,
while still maintaining strength. As a result, unit transportation costs
- measured in dollars per ton - dropped with no increase in capital costs. "As the
rail transport industry looks to increase payloads while holding costs
in check, high-strength steels offer a sound alternative to more expensive
materials, such as aluminum," said Kelly Arrey, a CANAC International
consulting engineer and author of the study. "This
is significant as we look to modernize the aging North American rail car
fleet." The study,
conducted for AISI's Railcar Task Force, demonstrates that 7,000 pounds
of 70-ksi steel replaced 9,800 pounds of 50-ksi steel, reducing tare weight
by 2,800 pounds. The weight savings resulted in pound-for-pound increase
in payload. Canadian
National Rail and Canadian Pacific Rail have used 70-ksi steel in more
than 21,000 freight cars. By contrast, U.S. rail car builders have used
36-ksi steel, with some use of 50-ksi, in building its fleet of 21 million
cars. As the
aging U.S. rail car fleet is replaced, the study demonstrates that designs
using high-strength steel offer significant potential savings both in
energy consumption and payload handling.
[back
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Finds Steel is Top
Choice for Automotive Material Citing
safety as a chief concern, U.S. car buyers who were polled recently by
Chilton Research Services overwhelmingly selected steel as the material
of choice for new cars, according to a report inAmerican Metal Market. In the
poll, 1,011 people were asked, "Thinking about what your car is made of,
do you have a preference among steel, aluminum or plastic?" The results
were strongly in favor of steel, with 627 respondents preferring steel.
Only 101 respondents favored aluminum, while 59 selected plastic. The
remaining people polled either did not own a car, did not have a preference
or did not respond. Steel,
in fact, was the material of choice for all survey groups regardless of
age, sex, income, race or education level. More than 60 percent of men
and women favored steel. A higher
percentage of older respondents tended to choose steel over the other
materials, while the preference for steel grew stronger as the income
scale went up. American
Metal Marketreported that the survey results are indicative of the
sentiment among car buyers that steel is safer than aluminum or plastic.
Steel industry executives told the publication that the poll backs up
what they've been saying for years - specifically, that steel is and should
remain the material of choice for cars. American
Metal Marketalso reported in the June 18 article that the outcome
of the poll did not surprise sources in the steel and auto industries. Brett
C. Smith, research associate with the Office for the Study of Automotive
Transportation in Ann Arbor, Mich., told the publication that the findings
appear to reflect "the comfort level most people have with steel, knowing
it is - and, from their perspective, at least, always has been - the dominant
material in car bodies."
[back
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Front Sidebars Armco
Inc. in Coshocton will start an $18-million upgrade of its plant to expand
plant shipping capacity 25 percent by 1998. The specialty steelmaker also
recently invested $5 million to enhance an anneal and pickle line at Zanesville,
which is expected to increase plant capacity for processing automotive
chrome stainless steels. An Ohio
Steel Commission member is among two Armco Inc. managers to be named co-chairmen
of the 1996-97 Coshocton County United Way campaign. Jay Parr and Frank
Cugliari will direct the effort. Parr is general manager of Armco's Coshocton
operation and serves on the Commission. Cugliari is manager of organizational
development. Armco also is corporate chair. Wheeling-Pittsburgh
Steel Corp. and Air Liquide America Corp. have announced construction
of a $50-million electric and steam producing cogeneration facility at
the steelmaker's South Plant in Mingo Junction. Scheduled for operation
in fall 1997, the facility will generate low-cost, reliable electric power
by burning the gas created during the ironmaking process. The Timken
Co. in Canton has acquired a Marlborough, Mass., tool steel service center
owned by Houghton & Richards, Inc. The service center will become a subsidiary
of Timken-owned Latrobe Steel Co. The move is designed to enhance Latrobe's
tool steel distribution capabilities.
[back
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Steel Producers Object to
Confidential Utility Agreements The Ohio
Steel Commission has adopted a resolution urging the Public Utilities
Commission of Ohio to refuse to grant confidential treatment to discounted
rate agreements between electric companies and their customers. The Commission
contends that such treatment denies energy users access to information
that can help them negotiate competitive rates. The resolution
follows the PUCO's decision to keep secret the terms of a contract between
Cleveland Electric Illuminating Co. and American Steel & Wire Corp. in
Cuyahoga Heights. The PUCO approved the contract last year and agreed
to seal it from public review until at least October 1996. "By shrouding
such agreements in secrecy, the PUCO sets up an unfair competitive climate,"
said Harold V. Kelly, co-chairman of the Commission and executive vice
president and general counsel at Republic Engineered Steels, Inc. in Massillon.
"Full and timely access to rate agreements is needed for energy users
to know what rates and terms are available in the marketplace." Ohio
steel producers are the largest industrial users of electricity in the
state, consuming more than $300 million in electricity during 1995. In
addition, the Commission estimates that electricity costs comprise approximately
$300 million of the amount Buckeye State producers spend on purchased
goods and services. "The
steel industry has a keen interest in not only reducing its own electricity
bills, but those of its suppliers, employees and customers," said Martin
Suhoza, director of energy procurement at LTV Steel Co. and chairman of
the Steel Commission's energy subcommittee. The Commission
and its nine member steel companies have called for competition among
utility companies since the Commission was formed in 1991. Confidential
agreements can offer an unfair advantage to companies that compete with
Ohio's long-standing steel producers, whose rate agreements are public,
the Commission contends. "Secret
rate agreements compound the economic disadvantages resulting from the
current lack of competition in electricity, which precludes access to
suppliers anxious to meet our price and service requirements," Kelly said. "We face
competition from steel producers in other states and countries, as well
as new start-up mills. If confidentiality is allowed to continue, potential
competitors will be able to negotiate heavily discounted rates to the
detriment of some of the Buckeye State's leading employers."
[back
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STEEL DATA REPORT:
Second Quarter 1996 Item Quarter
Ended June 30
Six Months Ended June 30 1996
1995 % chg 1996 1995 % chg Steel
Production (tons) 4,298,840 4,261,843 0.9 9,555,547 8,837,771 8 Shipments
(tons) 3,798,130 3,867,091 -2 7,546,084 7,657,396 -1 Payroll
$363,443,598 $375,363,326 -3 $760,769,899 $774,349,341 -2 Average
Employment 28,385 29,749 -5 28,192 29,470 -4 Capital
Investment Spending $78,068,847 $217,532,993 -64 $154,959,422 $397,979,176
-61 State
and Local Taxes $18,288,744 $23,307,118 -22 $41,062,008 $50,187,127 -18 Healthcare
Spending $59,785,103 $67,116,488 -11 $126,007,183 $137,340,072 -8
[back
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Co-Chair, Member
Company Reps Named to U.S. Trade Panel Harold
V. Kelly, co-chairman of the Ohio Steel Commission, has been named to
the committee that advises U.S. government officials on international
steel trade policy. Kelly,
executive vice president and general counsel of Republic Engineered Steels,
Inc., joins three other Steel Commission members and an associate member
represented on the Industry Sector Advisory Committee for Trade Policy
Matters on Ferrous Ores and Metals. Steel
Commission member representatives on the committee include Douglas Brook,
vice president and Washington representative, LTV Steel Co.; Michael Haidet,
manager of investor relations, The Timken Co.; and John Bauer, director
of corporate affairs, Armco Inc. The associate member representative is
Maurice Gustin, manager of international sales, Lukens Inc. The committee
provides advice and counsel on trade barriers and agreements and is jointly
administered by the Commerce Department and the U.S. Trade Representative.
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