Ohio Steel Industry Advisory Council
Winter 1996
Legislative
Lookout
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Quarterly report text
On the Steel Front
Steel at Work
Steel Briefs
Steel supports 24 new homes
Workers Compensation Reform
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Kelly elected co-chairman, Cates appointed New
Legislation Would Catalyze
Development of Brownfield Lands The Ohio
Steel Commission is backing two Ohio House bills that signify movement
toward meaningful financial incentives to redevelop brownfield sites. House
Bills 441 and 442 could bolster opportunities for steel producers to revitalize
some former industrial and commercial sites by easing financial barriers
that hinder redevelopment. The bills, part of Gov. George V. Voinovich's
Jobs III program, would pick up where the initial brownfields law, Senate
Bill 221, left off in 1994. In a
resolution it recently adopted, the Commission said Senate Bill 221 was
an important first step. To continue making headway, it said, Ohio must
now focus on creating incentives that will enable private industry to
work with the state to revitalize these sites and create more jobs. The biggest
impediment to brownfield redevelopment is the potentially enormous cost
of environmental cleanup, points out James D. Donohoe, associate general
counsel and secretary of Republic Engineered Steels, Inc., and chairman
of the Commission's environmental subcommittee. "You
can't expect companies to take on the financial burden that is required
to clean up environmental problems created by previous owners without
some sort of assistance," Donohoe said. "Why should they invest in a brownfield
when they can find other sites that do not pose an environmental liability?" Donohoe
said Republic has canceled plans to redevelop brownfield property because
the cost of cleaning up liabilities created by past owners was too high. House
Bills 441 and 442 would not eliminate the problem, but they would move
Ohio in the right direction by encouraging companies to look favorably
on sites that require a modest level of cleanup, he said. House
Bill 442, approved 95-2 last month by the House, would create a $10 million
grant fund, some of which could be used to defray cleanup costs. State
Rep. Kerry Metzger of New Philadelphia sponsored the bill. House
Bill 441, introduced by Rep. Kirk Schuring of Canton and approved unanimously
this month, would provide tax credits of up to $500,000 to companies that
undertake cleanups. The credit would be higher if the cleanup occurs in
a targeted area. Steel
producers applauded Senate Bill 221 in 1994 because it provided the framework
for more realistic environmental regulations on brownfield sites so companies
did not have to restore them to pristine condition in order to use them.
For companies that volunteer to clean up brownfield sites, Senate Bill
221 holds out the promise of favorable tax treatment and a binding acknowledgment
from the Ohio Environmental Protection Agency that the property has been
adequately remediated. Donohoe said he is cautiously optimistic that the
Ohio EPA will eventually adopt realistic, risk-based cleanup standards
and streamlined procedures that will encourage wider use of Senate Bill
221 incentives. He and
other proponents of the new brownfield bills point out that, through January
1996, only two companies have taken advantage of the 1994 brownfields
law, thus indicating the need for further incentives. "Clearly,
it's time for Ohio to take another step," Donohoe said.
[back to top] Other
Legislative Action The Ohio
Senate last month approved Senate Bill 138, which would protect businesses
that voluntarily disclose and correct instances of environmental non-compliance.
Under current law, companies that conduct self-audits risk penalties from
regulators, who can obtain and use information in the audits. House hearings
on the bill, authored by Sen. Gary Suhadolnik, a member of the Ohio Steel
Commission, began in early February. Steel
representatives, testifying on behalf of their respective companies and
the Ohio Steel Commission, recently went before a joint legislative committee
to encourage continued use of both blast furnace and electric furnace
slag in road construction projects rather than other costly aggregates.
Steel produces 4 million tons of slag in Ohio per year. In addition, suggestions
were made to use stainless reinforcing bars in concrete highways to lengthen
their investment life.
[back to top] OHIO
STEEL DATA REPORT:
Fourth Quarter 1995 Item Quarter
Ended December 31 Year
Ended December 31 1995
1994 % chg 1995 1994 % chg Steel
Production (tons) 5,618,660 5,960,194 -6 18,689,748 18,794,628 -0.6 Shipments
(tons) 3,568,135 3,815,404 -6 14,523,523 14,412,262 0.8 Exports
(tons) 92,110 68,276 35 377,326 220,050 70 Payroll
$292,978,194 $295,518,837 -1 $1,418,293,209 $1,347,070,751 5.3 Average
Employment 28,785 28,711 0.3 29,294 29,130 0.6 Capital
Investment Spending $108,799,275 $77,495,837 40 $705,600,000 $412,289,000
71 State
and Local Taxes $14,173,052 $13,882,102 2 $90,906,697 $83,523,257 9 Healthcare
Spending $62,133,442 $62,310,477 -0.28 $264,122,341 $262,988,197 0.43
[back to top] Buckeye
State Steelmakers Report Nearly
$900 Million in 1995 Capital Spending; $600 Million Planned in 1996 Ohio
steel producers invested nearly $900 million in capital improvements last
year - almost double their spending in 1994, the Ohio Steel Commission
reported. The Commission
also said steelmakers expect to spend more than $600 million in 1996 on
capital improvements across the Buckeye State. "This
major investment by the steel industry demonstrates a high level of confidence
in Ohio as a good place to do business," said Harold V. Kelly, co-chairman
of the Commission and executive vice president at Republic Engineered
Steels, Inc., in Massillon. "It likewise illustrates that heavy manufacturing
is still a critically important element in any robust and growing economy." Last
year's figures reflect the start-up and completion of several large projects: - North Star BHP
Steel Co. Ltd. began building a new mini-mill in Delta, which will involve
investment of more than $430 million when completed late this year.
North Star BHP, a joint venture of North Star Steel Co. in Minneapolis,
Minn., and BHP Steel of Melbourne, Australia, is not a member of the
Steel Commission, but its capital spending totals are included in the
1995 and 1996 figures.
- Republic's $165
million casting and rolling facility in Canton, completed last year.
- Armco Inc.'s $100
million thin-slab casting facility in Mansfield, also completed last
year.
- Wheeling-Pittsburgh
Steel Corp.'s $80 million tin coating plant in Yorkville, for which
construction began last year. The plant is a joint venture between Wheeling-Pittsburgh
and steel companies from Japan and South Korea.
The $890 million in
spending across Ohio last year compares to $412 million in 1994 and $390
million in 1993. "Ohio is America's
second-leading steel-producing state, but we would like to be No. 1,"
said Donald Jakeway, co-chairman of the Commission and director of the
Ohio Department of Development. "The momentum we're seeing with steel
reinvestment in recent years tells us we're making progress toward our
ambitious goal." In 1994, the latest
year for which figures are available, Ohio steelmakers produced 17 percent
of the nation's steel, compared to 21.5 percent by Indiana, the leading
steel state. A year earlier, Ohio produced 16.5 percent of America's steel,
compared to 22.1 percent for Indiana.
[back to top] Producers
Promote Steel's
Advantages in Corrugated Pipe Ohio
steel producers are teaming up with other industry representatives to
promote the use of corrugated steel pipe in highway and other construction
projects. A 15-member
task force formed by the American Iron and Steel Institute is exploring
ways to increase corrugated steel pipe production and grab a greater share
of the marketplace. "Corrugated
steel pipe is not an everyday product that people come into contact with,
but it's a very important part of our industry," said Roger Newport, senior
product specialist at AK Steel Corp. in Middletown. "We're trying to be
more aggressive in the way we promote corrugated steel pipe." Steve
Magoon, another task force member and marketing manager at WCI Steel,
Inc. in Warren, added, "By combining our resources, we expect to educate
this market about the features that make steel a superior material." Newport
and Magoon are among five task force members associated with Steel Commission
member companies. The other three are David Howard of WCI Steel, who chairs
the task force; Don Bibey of Wheeling-Pittsburgh Steel Corp.'s Wheeling
Corrugating Co., which operates a plant in Martins Ferry, Ohio; and Ohio
Rep. Gary Cates of AK Steel, who also is a Steel Commission member. The task
force plans to contact departments of transportation on the federal and
state levels this year to review the benefits of corrugated steel pipe.
The group also will tout the advantages to engineers and take part in
celebrating 100 years of corrugated steel pipe use in Canada. The effort
aims to halt the inroads plastic has made over the last decade in the
pipe market, said Andrew Ziolkowski, construction market director for
the AISI. About 10 years ago, U.S. steel producers supplied 600,000 tons
of corrugated steel pipe to the marketplace annually, he said. Today,
the number hovers around 300,000 tons, which represents about eight percent
of total pipe use, Ziolkowski said. "We're
developing strategies that will help steel producers secure a significant
share of the market and take their place as leaders in supplying pipe
for construction projects," said Bibey, national highway products account
manager for Wheeling Corrugating. "We want to recapture what steel has
lost, then focus on exceeding what our share of the market was 10 years
ago." Steel
producers insist that corrugated steel pipe is a viable and dependable
alternative to plastic, whose shape can become altered under the weight
of fill dirt and other material. As evidence, task force members point
to a study commissioned by the state of Michigan on the durability of
plastic pipe in road projects. "The
study showed there were substantial failures in that particular material,''
Ziolkowski said, explaining that failures can range from fractures to
distortions. He added
that steel producers have developed dent-resistant, high-strength steel
for corrugated pipe, which has been documented to last more than 75 years. The task
force includes steel producers from the U.S. and Canada and eventually
will seek input from fabricators. The group is working closely with the
National Corrugated Steel Pipe Association and the Corrugated Steel Pipe
Institute of Canada.
[back to top] Steel
Briefs AK Steel
Corp., based in Middletown, named the second-ranking official of the U.S.
Department of Labor's Occupational Safety and Health Administration to
the steelmaker's new executive post of vice president, safety and health.
James W. Stanley, 51, had been with OSHA since its inception in 1971,
serving most recently as its deputy assistant secretary in Washington,
D.C. The Timken
Co., based in Canton, plans to buy the tapered roller bearing business
of a Polish manufacturer based in Sosnowiec, Poland. The acquisition is
subject to government approvals. The new company, Timken Polska, will
be a wholly owned subsidiary of Timken, a leading international manufacturer
of bearings and steel. Bearings produced at the Polish facility are used
in automotive, agricultural and industrial machinery applications. More
than 160 people attended a recent forum in Columbus that explored how
other states and the United Kingdom are moving toward competition among
electric utilities. Ohio Rep. Ronald Amstutz, a forum speaker, said he
expects to introduce legislation early this year to encourage such competition
in Ohio. The forum's sponsor, Industrial Energy Users-Ohio, and the Ohio
Steel Commission are among strong proponents of competition among power
companies.
[back to top] Steel
Supports 24 New Homes
Planned for Cleveland Neighborhood A project
that features the use of steel framing in two dozen homes is taking shape
in Cleveland, where LTV Steel Co. has joined with the Greater Cleveland
Habitat for Humanity to breathe new life into an aging inner-city neighborhood. LTV has
purchased steel framing and donated it to Habitat for construction of
a two-story, three-bedroom house in Bicentennial Village. The home not
only is Habitat's first all-steel framed home in Cleveland, but also is
the first house under construction in the Bicentennial development. "This
allows us to make a substantial contribution to rebuilding one of Cleve-land's
core-city communities," said Cole Tremain, a member of the Ohio Steel
Commission and vice president for public affairs at LTV Steel. "It also
showcases the value of steel as the material of choice for house framing." Steel
framing is one of the fastest growing home-building trends in the country
and represents a rapidly expanding market for galvanized flat-rolled steel,
a key product of several Ohio steel producers. The home
is the first of 24 LTV-sponsored, steel-frame Habitat houses that will
come to fruition in Bicentennial Village. LTV is investing more than $250,000
to provide steel framing, engineering consultation and construction tools
for the additional 23 homes. Habitat,
a nonprofit organization that builds and rehabilitates homes to sell at
affordable prices, hopes to have all 24 houses built during Cleveland's
200th birthday celebration this year.
[back to top] Steel
Producers Call for
Workers' Compensation Reform The Ohio
Steel Commission is calling on the Ohio Legislature to introduce legislation
to reform the state workers' compensation system and end the waste, fraud
and abuse that victimize employers and employees. "Ohio's
steel industry, its employees and shareholders are placed at a competitive
disadvantage to the extent its costs for workers' compensation are significantly
higher than those of other states because of inefficiencies in and misuse
of the system,'' the Commission stated in a position paper urging reform. The Commission
stressed that the Ohio General Assembly's action in the past three years
on workers' compensation bills has helped prepare the way for much needed
reform, but more work must be done. "These
reforms, although important, fall short of the substantive reform necessary
to fix the Ohio system's ongoing problems of waste, fraud and abuse,''
the Commission said. "It is imperative, therefore, that legislation be
introduced and passed that corrects the remaining fundamental problems
. so as to provide adequate compensation to those injured employees who
are genuinely entitled to benefits." The nine
Ohio steelmakers who are members of the Commission spent more than $27
million in 1995 on workers' compensation. Ohio steel producers employ
more than 30,000 people. The Commission
recommends prompt legislation to address the remaining issues and create
a system "that will strengthen Ohio's work ethic, improve the state's
economic competitiveness and further stimulate the creation and expansion
of jobs in Ohio." Specific
proposals must be enacted to restore fairness and balance in the system,
building on recommendations of the Injured Workers' Protection and Compensation
Task Force, the Commission said. The Commission
noted that Gov. George V. Voinovich and the Legislature embarked on reforming
the system in 1993 with passage of House Bill 107, which created the task
force, streamlined the Industrial Commission hearing process and introduced
the framework for managed-care concepts. Since
a report by the task force in early 1995, the Legislature has approved
two additional bills. House Bill 7 changed the governance of the Bureau
of Workers' Compensation, while House Bill 103 provided relief for employers
from intentional tort lawsuit abuse. Despite
these positive changes, the Commission nevertheless found that "there
is need for reforming the Ohio workers' compensation system in order to
eliminate opportunities for waste, fraud and abuse.'' Thus, it recommended
the prompt introduction and adoption of comprehensive legislation to address
the remaining issues.
[back to top] The
Commission cites nine
specific areas for reform: - Permanent Total
Disability
- Permanent Partial
Disability
- Nonworking Wage
Loss
- Coordination of
Benefits
- Substantial Aggravation
- Occupational Disease
- Continuing Jurisdiction
- Drug-Free Workplace
- Payment Without
Prejudice
[back to top]
Commission
Elects Kelly Co-Chairman,
Appoints Rep. Cates Harold
V. Kelly, executive vice president and general counsel at Republic Engineered
Steels, Inc. in Massillon, has been elected co-chairman of the Ohio Steel
Commission. Ohio
Rep. Gary Cates has been appointed to an unexpired term on the 16-member
Commission, a group of steel, labor, education and government leaders. Kelly
succeeds Charles H. West, president-steel at The Timken Company in Canton,
who completed a two-year term as co-chairman and will remain a Commission
member. By law, the Commission's standing co-chairman is Donald E. Jakeway,
director of the Ohio Department of Development. Rep.
Cates will serve the remainder of the term of Ohio Rep. Scott Nein, who
last year left the Ohio House to fill an open seat in the Ohio Senate. Kelly
is a member of Republic's executive committee and has direct responsibility
for legal affairs, human resources, investor relations and public and
government affairs. He has been with Republic and its predecessors since
1973. Before
joining Republic, he was an assistant attorney general of Virginia and
had a private law practice in Virginia and Washington, D.C. Kelly
has been a member of the Steel Commission since 1991, when it was created
by Gov. George V. Voinovich. Rep.
Cates represents Ohio's 58th District and is a senior technical development
engineer at AK Steel Corp. in Middletown. He has been with AK Steel and
its predecessors since 1978. Rep.
Cates graduated from Virginia Tech with a bachelor's degree in civil engineering
and from the University of Dayton with a master's of business administration.
[back to top] | 
