Ohio Steel Industry Advisory Council
Summer 1998
On
the Steel Front
Steel Front Sidebars
Legislative Lookout
Steel Council Seeks Delay of Air Standards
Steel At Work: UltraLight Auto Makes Its Debut
Diverse Groups Continue to Work Together for Deregulation
Ohio Steel Council Members Tapped for New Posts
Fourth Annual Ohio Appliance Roundup Makes Strong
Start Steel
Surpasses Plastics, Aluminum in Favorability Ratings Steel continues to
climb in a number of important surveys, including those looking at favorability
ratings as well as use of steel in automobiles. Since the launch of
its five-year image campaign in 1997, TheSteelAlliance has conducted a
series of surveys charting the favorability of steel's image with the
public. Results indicate steady and impressive improvement. Ohio steel
producers are among the steel companies participating in the alliance. At the outset of the
campaign in May 1997, the public was polled as being twice as likely to
have heard, read or seen something positive about steel versus something
negative (2 to 1). By this past spring, that measurement had jumped to
12 to 1. "These are remarkable
results, confirming strong consumer support for steel as a material of
choice," said David Hoag, chief executive officer ofLTV Steel Co.in Cleveland and chairman of TheSteelAlliance. "The public rightly
understands the superior strength, versatility and value of today's new
steel." The same survey also
asked respondents to rate the favorability of steel on a scale of 1 to
100, with 100 being the best. Steel has moved from a benchmark rating
of 63 in May 1997 to 81 in the latest survey. The campaign goal was to
move steel just ahead of competing materials such as plastic and aluminum,
which have ratings in the mid 60s. "These results say
a great deal about the public's deep relationship with steel," explained
Mark Stephenson, executive director of TheSteelAlliance. "We are learning
that steel has a Ôlatent empathy' with the public and that the ad campaign
has tapped into that empathy." Meanwhile, an American
Metal Market survey concerning materials used in 1998 automobiles found
that steel is expected to gain an average of 20 pounds, or 1.1 percent,
over 1997 levels. Although conventional steel - flat-rolled, tubular,
bar and rod - is expected to decline slightly, the amount of medium, high
and ultra-high strength steel is expected to increase significantly. While steel accounts
for 55.5 percent of a car's mass today, the steel industry is committed
to increasing that percentage by continuing to develop lighter, stronger
steels.
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Front Sidebars - CSC, Ltd.broke ground recently on a $100 million modernization in Warren that
includes installation of ultra-high-power melting, continuous casting
and other new technologies.
- The Timken Companyis developing a by-product processing facility near its Faircrest Steel
Plant in Canton, becoming the first company to use a new process that
converts by-products of the steel and bearing manufacturing process
to reusable raw materials.
- Nicholas G. Hall,
professor of management sciences and industrial systems engineering
atThe Ohio State University, received the Pacesetters' Research
Award, given to the top researcher at the Fisher College of Business.
He also was elected executive vice president and president-elect of
Manufacturing and Service Operations Management, the national society
of operations management professionals.
- Ohio Coatings Company,
a joint venture ofWheeling-Pittsburgh Corp., celebrated its
first full year of operation recently with an open house attended by,
among others, Patrick Valente of theOhio Department of Development.
Ohio Coatings operates the first new U.S. tinplate line in 30 years.
- James G. Bradley
has been named president and chief executive officer ofWheeling-Pittsburgh
Steel Corp., which operates Ohio plants. He previously was vice
president of operations.
- AK Steel Corp.in Middletown won the 1997 Max Edward Safety Award, only the third U.S.
integrated steel producer to receive the coke plant safety award. AK
Steel also received a commendation from Ohio Representative Gary Cates
for its contractor safety program.
- Former Ohio Attorney
General Anthony J. Celebrezze Jr. was elected in March 1998 to the Board
of Directors atRepublic Engineered Steels, Inc.He is a partner
at Dinsmore & Shohl LLP.
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Steel
Council Urges Change in Volume Cap Program The Ohio Steel Council
is urging state officials to expand the steel industry's allocation of
tax-exempt financing for qualified capital improvement projects, contending
the current system places the industry at a competitive disadvantage. The Council has asked
the Joint Select Committee on Volume Cap to allocate more tax-exempt bonds
to steel-related projects. Under the volume cap
program, each state is permitted by the federal government to issue a
set amount of tax-exempt bonds for qualified construction projects in
the private sector. Ohio's volume cap for 1998 was approximately $550
million. In the steel industry, new construction projects that improve
air quality or result in other environmental benefits can generally qualify
for this financing. "The competitiveness
of the Ohio steel industry is tied directly to our ability to modernize
and reinvest in our facilities," said Harold V. Kelly, co-chairman of
the Council and executive vice president atRepublic Engineered Steels,
Inc. in Massillon. "The public ultimately
benefits from this investment in the form of good-paying jobs and higher
personal and property taxes paid by steel producers. Failure to set aside
an adequate amount of the volume cap for the steel industry could hinder
further investment in Ohio while encouraging investment in those states
that are providing significant amounts of these bonds for steel projects." In past years, the
state has provided a portion of its volume cap for steel projects. A proposal
now under consideration would provide only 7 percent of the volume cap
for steel projects beginning in 1999 and establish a maximum of $25 million
for any one project. The Council contends
the proposal is inadequate because it would make only about $38.5 million
available to the entire industry, and the $25 million limit would be insufficient
for most steel projects. Ohio steel producers
have invested more than $3 billion in upgrades and expansions in the past
five years and have projected they will spend in excess of $530 million
this year. On average, each dollar of tax-exempt financing is matched
by more than a dollar of capital investment from steel companies. Because the Council
recognizes that other important industries seek tax-exempt bond financing,
it has pledged to assist in efforts with the U.S. Congress to expand the
amount of tax-exempt financing permissible under the Internal Revenue
Code.
[back
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Council Seeks Delay of Air Standards The Ohio Steel Council
is seeking the support of Ohio congress members and senators to delay
new federal air-quality standards, citing potential adverse effects on
businesses and consumers. In a letter to the
Ohio congressional delegation, the Council said the new standards promulgated
by the U.S. Environmental Protection Agency would have a chilling effect
on the state's economy because they would require a greater reduction
in ozone emissions for Ohio and other midwestern states. The Council is taking
issue with the EPA's contention that these restrictions will reduce ozone
emissions in the Midwest and significantly improve air quality downwind,
primarily on the East Coast. The group maintains
that the decision to require greater reductions in the Midwest is based
on unsound technical judgments as well as incomplete or outdated information. "Asking the Midwest
to shoulder the responsibility for ozone levels in the Northeast is a
bold step and should be based on corroborated scientific evidence," said
Harold V. Kelly, co-chairman of the Council and executive vice president
atRepublic Engineered Steels, Inc. in Massillon. "The EPA is not allowing
sufficient time for all parties to evaluate the data, perform tests and
review results. Ohio businesses have a right to expect that there would
be a solid scientific foundation for governmental action of such considerable
economic impact." The Council is urging
delegation members to take action opposing the EPA's efforts to implement
the standards until further technical information can be provided to support
the rules. Under the rules, Ohio
utilities would have to spend substantial sums to meet compliance requirements.
Much of that cost could be passed on to Ohio businesses and residential
consumers. The Ohio steel industry alone spends in excess of $300 million
on electricity each year. In addition, the standards
could force steel producers to invest in unnecessary emission control
equipment, which would put them at a disadvantage when competing with
other states not targeted in the EPA plan.
[back
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At Work: UltraLight Auto Makes Its Debut Most recently on display
at the New York Stock Exchange, the UltraLight Steel Auto Body has been
creating a stir since its unveiling in March. Engineers, lawmakers
and government officials have been favorably impressed by the UltraLight's
touring display, which features the auto body itself and includes supporting
materials explaining what has gone into the design and engineering. The UltraLight has
appeared before the Big Three automakers and at many trade shows and conferences
and other public sites. The UltraLight is up to 36 percent lighter than
the benchmarked four-door sedan bodies. It is also very competitive in
stiffness, strength, performance, safety and affordability. A consortium of 35
steel producers in 18 countries, includingAK Steel Corp.in Middletown,LTV Steel Co. in Cleveland, and WCI Steel, Inc.in Warren,
initiated and paid for the $22 million UltraLight project. The car body
was designed and built by Porsche Engineering Services, Inc., in consultation
with the steel companies. Steel is already the
dominant material in automobiles, but the UltraLight demonstrates the
steel industry's commitment to tomorrow's generation of fuel-efficient
cars. "We now have an all-steel
auto body that meets or exceeds the fuel efficiency, safety and environmental
challenges of the next century. Steel will remain the strongest, lightest
and cheapest all-around material in the automobile industry," said Pat
Tatom, vice president-commercial at WCI Steel. In a separate project,
specialty steel producerArmco Inc., in conjunction with a Detroit-based
design engineering firm, is developing a stainless steel modular automobile
frame that could surpass aluminum frames and make cars of tomorrow stronger,
lighter and less costly to manufacture.
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Groups Continue to Work Together for Deregulation Efforts to deregulate
Ohio's electricity industry are continuing among legislative leaders,
electric utilities and customers. Legislation introduced
in March by Sen. Bruce Johnson, R-Columbus, and Rep. Priscilla Mead, R-Columbus,
would allow customers to choose among competing electric utility companies.
Electricity deregulation has the support of the Ohio steel industry and
the Coalition for Choice in Electricity, a diverse group of electrical
customers. In the coming months,
alternatives to the existing bill are expected to be introduced and committee
hearings will be held as legislators draft legislation that will be satisfactory
to all parties affected. "This process could
open the way for competitive electric rates and fair opportunities for
all involved," said Harold Kelly, co-chairman of the Ohio Steel Council
and executive vice president of Republic Engineered Steels, Inc. "Communication
and negotiation are key to reaching an agreement that will benefit steel
producers, consumers and the utility companies." The Council believes
that the power outages and excessive electric costs experienced by Ohio
steel companies because of the recent hot weather and the shutdown of
electric generating plants could have been avoided or minimized by laws
permitting open market access to electricity. Electric rates are
important in determining the competitiveness of Ohio's steel industry.
The Ohio Steel Council's member companies, which together consume about
$300 million in electricity annually, want Ohio to remain an attractive
location for business and industry. Twenty-two states have deregulated
electricity or are in the process of deregulating.
[back
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Steel Council Members Tapped for New Posts Three representatives
of the Ohio Steel Council recently have been promoted at their respective
companies. John G. Hritz has
been named senior vice president, general counsel and secretary atAK
Steel Corp.in Middletown. He continues to be responsible for employee
relations, law, environmental affairs and corporate administrative functions. Hritz began his career
at AK Steel in 1989 as counsel. Following several promotions, he was named
vice president, employee relations in 1996 and later vice president, general
counsel and secretary. Jerry A. Goodwald,
general manager ofNorth Star Steel Tubular Division in Youngstown,
has been promoted to director of operations-North Star Steel. Goodwald has 20 years'
experience in the steel industry. Goodwald joined the North Star Steel
organization in 1998 as general supervisor-quality assurance and technology
at the Youngstown facility. Following several promotions, he became general
manager of the tubular division in 1996. Thomas A. Helinski
has been appointed to vice president-primary operations forWheeling-Pittsburgh
Steel Corp.Helinski joined the company in 1972 and has advanced through
a succession of management positions in operations, purchasing and raw
materials. He has overall operating
responsibility for the plants in Steubenville and Mingo Junction, Ohio,
and Follansbee, W. Va. These include the coke plant, blast furnace, basic
oxygen furnace, continuous caster and 80-inch hot strip mill.
[back
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Annual Ohio Appliance Roundup Makes Strong Start The Fourth Annual
Ohio Appliance Recycling Roundup is under way, with expectations of meeting
last year's collection of more than 30,000 appliances. Continuing through
the fall, this year's drive already has resulted in the collection of
more than 5,500 appliances. According to the Steel Recycling Institute,
the Ohio Roundup is the most successful in the nation. "Ohio's program continues
to grow as more state residents learn the importance of recycling, rather
than landfilling out- of-service appliances," said Bill Heenan, president
of the Steel Recycling Institute. The event is sponsored
by the Steel Recycling Institute, the Ohio Steel Council, Ohio Department
of Natural Resources, Institute of Scrap Recycling Industries and Whirlpool
Corporation. The number of appliances
collected and recycled has nearly doubled each year since the program's
inception in 1995. This year, 29 solid waste districts representing 54
counties are holding events to collect old appliances and turn them over
to the steel industry for use in making of new steel products.
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