What's Left of Big Steel? After Years of High Wages, High Prices and Protectionism, an Industry Struggles To Survive
A trip through the Monongahela Valley gives a picture of what the "restructuring" of the American economy in the 1980s is all about. Ten years ago, the aging mills of this valley were still producing vast quantities of steel-but not very efficiently. They were a symbol of a high-cost, featherbedded steel industry, in which labor and management had united to seek protection from foreign competition.</br></br>Today, the Mon Valley looks like Atlanta after Sherman's March. The vast steelworks that lined the banks of the river-Homestead, the Carrie Furnaces, Edgar Thompson, Duquesne, Clairton, Pittsburgh Works-are rusted and shuttered. The mills are gone, the workers are gone; but more than that, an entire culture is gone.</br></br>The new, "restructured" steel industry is leaner and more profitable. Steel employment has plummeted, from about 400,000 in 1980 to about 155,000 last year. At USX, the industry leader, the steel workforce has fallen from 100,068 people in 1980 to 19,657 last year. Meanwhile, productivity has increased sharply. At USX, it now takes 3.8 manhours per ton of steel shipped, compared to 10.8 manhours in 1983. Five years ago, labor costs ate up over half the sales dollar at USX; today, it's less than 20 percent. Across the industry, steel executives are aggressively managing their plants and retrenching to their best facilities.</br></br>These changes are breathing life back into an industry that, 10 years ago, seemed to be dying on its feet. And the simple truth is that if the industry and the union had succeeded in their demands for protection from "unfair" foreign competition-if the Dick Gephardts of the day had triumphed, in other words-this essential cost-cutting might never have happened.</br></br>But there's a dark side to restructuring, too. As the industry has gotten leaner, it has also gotten meaner. With the bosses determined to cut costs, labor-management relations at some companies are returning to the confrontational model of the 1930s. The big companies, which once bargained jointly, now confront the union individually and haggle over concessions. Wages have fallen across the industry. And the jewel of steel's labor relations, the no-strike "Experimental Negotiating Agreement," has disappeared, with USX taking a long and bitter strike in 1986 in an effort to cut costs.