Ohio Steel Industry Advisory Council
Winter 1997
Legislative
Lookout
On the Steel Front
Quarterly report text
Railroad merger
Recycling roundup
Steel at work
Steel Front sidebars
Air standards
Ohio hosts AISI General Meeting
Steel
Council Supports Coalition
for Choice in Electricity The Ohio Steel Council
has adopted a resolution supporting the principles and goals of the Coalition
for Choice in Electricity, a diverse group that is calling for legislative
reform to let consumers choose their own electricity suppliers. "The Council's adoption
of this resolution signifies that Ohio steel producers are committed to
seeing customer choice for electricity for the industry and all Buckeye
State consumers as well," said Martin Suhoza, chairman of the Council's
energy subcommittee and director of energy and production materials at
LTV Steel Co. in Cleveland. The resolution comes
at a time when the Ohio Legislature is considering reforms to open the
electricity industry to competition. Speaker of the House
Jo Ann Davidson, R-Reynoldsburg, and Senate President Richard H. Finan,
R-Cincinnati, are convening a joint select committee to review the so-called
retail wheeling issue, a move welcomed by Governor George V. Voinovich. "Surrounding states
have taken steps toward retail wheeling of electricity in order to lower
energy costs for consumers - an action that could threaten Ohio's competitive
position," Voinovich said in his state-of-the-state address. "The bottom line is
that we must maintain Ohio's competitive edge and protect Ohio jobs." The Steel Council's
nine member companies purchased more than $300 million in electricity
in 1996 to run their Ohio plants. A similar amount is spent on electricity
through purchases from suppliers.
[back
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Steel Producers Plan to Invest More
Than $500 Million in 1997 Capital Improvements Ohio steel producers
plan to spend more than $500 million in capital improvements across the
Buckeye State during 1997. "Ohio steelmakers
continue to be faced with market conditions that require them to reinvest
heavily in their facilities," said Harold V. Kelly, co-chairman of the
Ohio Steel Council and executive vice president at Republic Engineered
Steels, Inc. in Massillon. "As we enter 1997,
we will continue to help Ohio leaders understand the enormous economic
impact of our industry and urge that they advance public policies which
encourage capital investment in new facilities." The 1997 figures reflect
several projects announced in recent months: - LTV Steel Co.'s
new $20 million pickling line and $60 million worth of additional upgrades
at its Cleveland Works.
- CSC Ltd.'s comprehensive
modernization in Warren, with projected spending of $75 million to $100
million over the next two years.
- The Timken Company's
$55 million rolling mill modernization at the Timken Harrison Plant
in Canton.
The $500 million projected
for 1997 follows 1996 expenditures of $718 million, which included year-long
construction at North Star BHP Steel Co.'s new minimill in Delta, Ohio.
Construction there is essentially completed. Capital spending data
for North Star, which is not a member of the Council, were not available
for 1997.
[back
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STEEL DATA REPORT:
Fourth Quarter 1996 Item Quarter
Ended December 31 Year
Ended December 31 1996
1995 % chg 1996 1995 % chg Steel Production (tons)
5,955,648 5,618,660 6 19,905,795 18,689,748 7 Shipments (tons) 3,361,522
3,568,135 -6 14,523,520 14,523,523 0 Payroll $305,108,646
$292,978,194 4 $1,411,719,058 $1,418,293,209 -0.5 Average Employment
25,451 28,785 -12 27,671 29,294 -5 Capital Investment
Spending $155,709,489 $108,799,275 43 $407,956,604 $705,600,000 -42 State and Local Taxes
$25,565,792 $14,273,052 79 $103,043,942 $91,006,697 13 Healthcare Spending
$63,452,442 $62,133,442 2 $246,363,119 $264,122,341 -7
[back
to top] Steel
Council Raises Concern over
Proposed Railroad Merger The Ohio Steel Council
has submitted a letter to Governor George V. Voinovich opposing Conrail
Inc.'s possible merger with CSX Corp., contending the move would not satisfy
rail requirements for many steel producers. The Steel Council
believes the merger could lead to reductions in rail service or higher
rail rates for many steelmakers. The Council also expressed
concern that a potential merger of Conrail and Norfolk Southern Corp.
could limit competition. The letter came in
response to the Conrail board's commitment to merge with CSX and the subsequent
bid by Norfolk Southern to buy Conrail shares. "A majority of the
steel companies recommend that until further information is provided by
the railroads regarding such specific issues as competitive access, rates,
safety, line sales and availability of rail cars, the Ohio Steel Council
should oppose a Conrail/CSX merger and be wary of a Conrail/Norfolk Southern
merger," stated Harold V. Kelly, co-chairman of the Council and executive
vice president at Republic Engineered Steels, Inc. in Massillon. The Council's nine
member steel companies use rail for receipt of raw materials or shipment
of finished products, or both. "A CSX/Conrail merger
would remove the present competition that exists at plants served by both
railroads, eliminating their access to competitive rates and service,"
said Edward R. Caine, president and chief executive officer of WCI Steel,
Inc. in Warren. WCI is served by CSX and Conrail lines. LTV Steel Co. raised
concern over a Conrail merger with CSX or Norfolk, citing the loss of
competition could lead to reductions in service at LTV facilities in Cleveland,
Columbus, Warren and Youngstown. CSC Ltd.'s greatest
concern is downsizing by CSX, which abandoned a rail line into CSC's Warren
plant three years ago. CSC had to rely on an economic development agency
to buy the line and restore service.
[back
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Council Joins Ohio
Appliance Recycling Roundup The Ohio Steel Council
is teaming up with the Steel Recycling Institute and other organizations
as a sponsor of the third annual Ohio Appliance Recycling Roundup in April. This year's roundup
will feature participation by more Ohio counties. In 1996, 35 counties
planned special activities that resulted in the collection of 16,891 appliances,
which comprise on average about 75 percent steel. This year, 45 counties
have joined the effort. Participating solid waste districts in Ohio will
hold kickoff events in April. "Statewide interest
in the program is building in terms of participants and number of appliances
that are collected," said Bill Heenan, president of the Steel Recycling
Institute. "Our long-term goal is to help people understand they don't
have to wait for a major event to recycle their steel appliances." Other sponsors include
the Ohio Department of Natural Resources, the Institute of Steel Recycling
Industries (Ohio Chapters) and Whirlpool Corporation. ODNR is providing
grants to participating counties. Collected items will
enter the scrap recovery network, where their steel components will be
separated and shipped to the Ohio steel industry for re-use. Appliance
recycling reduces the waste dumped in landfills and provides the steel
industry with a source of quality scrap.
[back
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Framing Gets
Boost from Building Officials The Council of American
Building Officials' approval of standards for steel-framed homes is being
hailed as the first step in gaining widespread acceptance of steel in
the residential framing market. By adopting the standards,
the council - known as CABO - removed a key barrier in making steel-framed
homes cost competitive with wood counterparts. "Recognition by CABO
is an essential step in the evolution of steel products in residential
construction since it establishes uniform standards and promotes universal
acceptance," said David A. Howard, general manager of sales at WCI Steel,
Inc. in Warren. Many consumers are
poised to accept steel framing over wood, according to a survey by American
Metal Market/Chilton Research Services. More than half of
poll respondents - 52.6 percent - stated they would consider purchasing
a home built with steel framing rather than wood, American Metal Market
reported December 3, 1996. Jim Stoyka, manager
of customer service for LTV Steel Co., said the standards could increase
steel's appeal from a price standpoint. "The standards take
some of the engineering cost out of building a steel-framed home," Stoyka
said. "Anytime you can save money for the homeowner, it can help you make
inroads in the housing market." By accepting steel-framed
homes into the one- and two-family structure building code, officials
have eliminated the requirement that a structural engineer be involved
in reviewing and approving plans. Now, builders can
design and construct steel-framed homes as easily as they can design and
build wood homes. oal is achieved, an additional 500,000 tons of scrap
metal would be needed to meet demand.
[back
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Front Sidebars Leonard H. Chuderewicz
has been named president of USS/KOBE Steel Company in Lorain. He previously
was president of USS-POSCO Industries, a partnership between USX Corp.
of Pittsburgh and Pohang Iron & Steel of South Korea, and was plant manager
of Double Eagle Steel Coating Co. The Ohio Department
of Development's International Trade Division has established a regional
office in Israel to identify trade opportunities and establish contacts
for Buckeye State steel producers and businesses. The effort in the Middle
East augments trade offices in Canada, Mexico, Japan, Hong Kong and Belgium. The Ohio Steel Commission
became the Ohio Steel Council effective December 2, 1996. The change was
made after a committee created by the Ohio General Assembly conducted
a review of state agencies and bodies and realigned titles where appropriate.
[back
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Steel Producers Oppose Proposed Air Standards,
Citing Adverse Effects on Industry, Economy The Ohio Steel Council
contends new air-quality standards proposed by the U.S. Environmental
Protection Agency will adversely affect the industry and the Buckeye State's
economy. Citing a lack of scientific
or economic justification, the Council has adopted a position paper voicing
serious concerns about proposed revisions to the National Ambient Air
Quality Standards for ozone and particulate matter. "The economic burden
these new standards would place on the nation's economy generally and
steel producers specifically is unjustified," said Harold V. Kelly, co-chairman
of the Council and executive vice president of Republic Engineered Steels,
Inc. in Massillon. "It is not sound public policy in the absence of solid
scientific data to support the alleged health benefits. "At a time when air
quality is improving, these draconian measures are unwarranted and unnecessary.
A balance must be struck between benefits and costs before any changes
are made to existing environmental standards." The Council says the
standards would force steel companies to add unnecessary pollution control
and testing measures. The group also contends the new rules would discourage
industrial development in many of Ohio's counties. Available scientific
data indicates current ozone standards protect human health and fostered
a 12-percent reduction of ozone concentration in the United States between
1985 and 1994, according to the position paper. There is insufficient
monitoring data to support the new particulate standard. Further, the
scientific community has not confirmed that the standard would create
health benefits, the Council says. The Council is calling
for thorough analysis of the standards and sufficient time to review and
respond to the proposal.
[back
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Hosts Meeting of Steel Industry
Leaders, Decision-Makers Steel industry leaders
and decision makers will set their sights on Ohio for the American Iron
and Steel Institute's General Meeting May 28 and 29 in Cleveland. The theme for the
meeting at the Renaissance Cleveland Hotel is "Steel 2010 - Shaping the
Future," which will provide an opportunity to examine how the steel industry
can be pivotal in shaping a strong future in North America and throughout
the world. "Our focus is to be
forward thinking in terms of innovation, competitiveness and growth,"
said Andrew G. Sharkey III, AISI president and CEO. "Ohio is an ideal
setting for this meeting because of its important steelmaking role." Ohio is the second-leading
steel producing state and is hosting the annual meeting for the first
time. The meeting traditionally had been held in New York City for 75
straight years until 1995, when it moved to Chicago. Industry executives,
steel suppliers, analysts and others attend the meeting to keep abreast
of new and emerging issues and concerns.
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