> US Steel and other steelmakers eventually followed those foreign competitors to upgrade factories and equipment, but they still largely used the older methods to make steel by melting raw materials such as iron ore in giant blast furnaces.
> Those “integrated” steelmakers soon lagged behind so-called “mini-mills,” nonunion competitors that use more efficient electric arc furnaces to turn old steel scrap from discarded cars and other products into new steel products.
> US Steel didn’t open its first electric arc furnace until 2020.
This means "chinese" mini mills^1 which require a lot of manual labor to collect the steel. This is not a technology problem, but a manpower/safety race to the bottom, that the US couldn't effectively participate in. Unions may have prevented useful compromises, granted.
New technology was not a priority, because it wouldn't help the situation. It's not like steel makers stopped doing cost/benefit analyses for decades.
A Japanese owner looks like a strategic political move, given Japan's place in the world theater. The tariffs against steel were removed for the US and Japan at the same time circa 2022. Coincidence?
^1 https://www.reuters.com/article/us-china-steel-overcapacity-...
> One pioneer of this mini-mill technology, Charlotte-based Nucor has a market capitalization of $42.5 billion compared to US Steel’s value of just over $14 billion as set by this deal.
> Nucor is also the largest steelmaker in America by output, making an estimated 20.6 million metric tons of steel per year, ranking 16th largest in the world. That compares to 14.49 million metric tons from US Steel, including its operations in Europe, which rank 27th in the world for 2022, according to the World Steel Association.
> What China could not achieve by Stalinist state planning or Maoist revolutionary enthusiasm, it achieved by letting a million private-sector smelters bloom.
Good luck with whatever.
Someone somewhere has to be making new steel.
I think regions / steel industries in the region go through phases. I can draw upon my experience with one of the biggest steel manufacturers in India and Europe. SE Asia is going through a phase where most of the steel consumption is met by primary steel, new steel made from blast furnaces consuming iron ore. A lot of that steel is exported but there is a very big domestic market.
The need for secondary steel (made from old steel scraps) will become important in the future for SE Asia. Back in the US, this is already the case.
Primary and Secondary steel have different properties. Secondary steel can not be used for some applications, they can only use Primary. Vice versa, using primary steel for some applications might not be economically feasible for some applications.
Whether it’s a case of nobody knows who owns them, regulatory hurdles, economics of breaking it down, or some other reason, I’ve often wondered why something like entire trains can just sit collecting graffiti after a railroad shuts down.
Does anyone have any insight? Is there not an abundance of material that’s recoverable low hanging fruit compared to creating new? Or is the metal recovered not as useful for chemical/physical reasons?
Where it's borderline, someone owns it and if you steal it you might get found out eventually.
Where it's very profitable, it gets stolen and reprocessed unless guarded (see: copper).
See https://chitransit.org/topic/4239-ex-cnw-pullman-rta-cars-in... for an example.
And the comparative cost of labor in e.g. China vs. US is driven by the balance of trade. Expensive labor is the price the US pays to run a trade deficit
In fact I think it was the head of US Steel, who put it succinctly several years ago: Somebody has to turn iron ore into iron.
And globally in descending reserves order: Australia, Brazil, Russia. China's extraction:reserves ratio is much higher and will exhaust reserves much quicker than the others.
So it'd make more sense to smelt it close, given the volume/weight ratio of ore to refined material.
Transport by sea... but that's still A LOT of tonnage to move ore.
[0] https://www.statista.com/statistics/267381/world-reserves-of...
[1] https://en.m.wikipedia.org/wiki/List_of_countries_by_iron_or...
Of course they did. It's even worse in legacy auto, Engineering has to get approval from the union for any significant new vehicle features.
Is "how many people get employed, and at what salaries" one of them?
The IBEW brings union workers in from multiple states and puts them up in temporary housing just to build these things as fast as possible. Everybody wants them, they are just so incredibly expensive at the size that US Steel needs.
Or because to believe that propaganda as a "universal truth" it would mean unions are not self-interested entities (unlike businesses and people).
I know it's a tired old adage that labor / labor unions was the reason for American steel manufacturing decline and rise of Japanese dominance. But from the inside, that simply wasn't so -- it was more a case that Japanese mills not only more modern but the entire manufacturing process, from casting to finished product, was more efficient. Even when new US mills gained new technology, it wasn't thought through and decisions seemed to be made the basis of old boy network than solid business acumen.
These factors that I'm speaking of were more along the lines of:
- a slab caster implemented, but there is already a bloom caster and only one crane facility to support both so both ran at less than optimal throughput.
- choosing to prioritize far less profitable slab casting for output to a joint venture plant in CA than very profitable bloom casting (& union definitely not in favor of this)
- buying coke at 10X price they could get elsewhere because old buddy favoritism
Basically, the Japanese firms were built a much more holistic basis -- JIT engineering, so that liquid is pored, slabs created and were delivered right into finished product processing. Whereas, by contrast, in the mill I worked at, slabs would be cast, then would cool in a yard, heated & slitted, then heated again for strip mill processing (it cost quite a bit of energy to heat to 2200/2300 degrees).
I mean, my boss & I would even spitball on how much better the place would run if it was bought out and run by (at that time, late 80s / early 90s) a foreign competitor that made decisions on business sense rather than old boy political network machinations.
Basically, all about: MANAGEMENT, MANAGEMENT, MANAGEMENT.
Not really? The difference is referred to as "primary" vs "secondary" steelmaking.
The US pumped out enormous quantities of steel from 1910-1980ish and then usage decreased as better computer models as well as plastics allowed a lot more efficient use of the material. This meant that a bunch of used steel was available and nobody could really consume steel fast anymore.
Consequently, "secondary" small mills recycling used steel were WAY more profitable than "primary" large mills making it from ore. This devastated the US steel industry which was mostly "primary" (some of that has changed).
Then ... China ... started consuming vast quantities of steel for development. At some point, China bought up and used most of the used steel that was available.
So ... today ... "secondary" steel is rising because the cheap used steel isn't laying around anymore. "Primary" steel is making a comeback as you need to produce original feedstock or the "secondary" producers have nothing to work with.
The correct answer to all this is: it's a balance. You need some primary steelmaking or you simply run out of feedstock. You need some secondary steelmaking to tweak the type of steel and provide smaller, specialty runs.
There is quite a bit of variability in these things among say G7 or G20 countries. Americans on the whole typically have higher net, higher volatility, lower security, for example. It gets complicated when you try and do "whole picture" comparisons (e.g. how to factor in state pensions/health care/etc.) but the dominance of the US economy worldwide and $ function as a reserve pays a very real divided to nearly everyone.
It's objectively better to work in a unionized environment. Let's you be "lazier" and get away with half-asserey - great from the worker perspective but from the perspective of a prospective buyer, ideally your product is produced by people who work as hard as possible. The Japanese have a work-hard without half-assing attitude. This is why Toyota/Lexus have consistency the best build quality, stitching, etc in their cars. Their employees are mostly not unionized and not even paid particularly better than the American ones - but the Japanese work ethic is preserved.
This is also why "made in japan" toyota/lexus is prefereed to made in america/canada toyota/lexus.
In Sweden (the largest industrial hub in Scandinavia), unions don't collectively negotiate wages with employers - they collectively set wages across an entire industry with the government and business management (think Syndicalism, which is the primary industrial philosophy in Europe compared to the US).
Also, blue collar membership has declined after the 2008 Financial Crisis dealt a killing blow to Volvo and Saab. Blue Collar union membership in Sweden peaked at 85% in the 1990s but has fallen to 59% in 2019.
Some American unions (primarily UAW and Teamsters) would have to fundamentally reform in order to act like European unions, and they would assuredly fight tooth and nail against such a change. Also, the kind of sector level salary negotiations common in Europe might fall foul of American collusion laws, and might anyhow be unpopular with local chapters (hypothetical example: if UAW and all major automotive manufacturers decided to set wages at South Carolina levels nationally, that would be a pay cut in the Midwest).
The characterization that they would eschew reform even when it would boost their popularity is not reflected in current events (certainly the managerial friendly unions of the past would avoid reforms)
At the end of the day, unions in Europe are much more pro-business management than any union in the US can ever dare.
For example, Swedish unions didn't go on strike when Geely fired thousands of Swedish autoworkers when acquiring Volvo, and German (yes not Nordic) unions haven't fought for salary increases leading to German salaries remaining stagnant since the 2000s, while helping German corporations like Volkswagen, Daimler, etc remain competitive globally.
In the US, unions will go militant and remain independent of the government and management because they are grassroots driven. In Europe, unions are subordinated to the government and management, as Union leaders end up joining both.
But, from the buyers perspective, I don't want union hands touching my car. I also will NEVER buy a volvo because they're bad cars from every standpoint except safety. This is the brand that though a turbo, supercharged hybrid drive-train would be a good idea in an SUV. The SUV isn't even that fast despite it!
But you can't, because you're wrong and you know it.
US car makers were always bad when it came to quality, unions or not since Tesla is no difference. Build quality doesn't come from "working ad hard as possible", in general quality is indorectly proportional to the amount of hustling people do, voluntary or othetwise. Build quality in anything assembeld comes from proper engineering, proper assembly procedures, properly trained staff, solid quality culture (guess where the Japanese traditionally excel) and a quality focused organisation. None of those have anything to do with unions, half-assery or anything else you brought up.
... for more than twice as much! He kinda left the part out.
It's irrelevant because the workers won't see a penny of any of it. You kinda left that part out.