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Ohio Steel Industry Advisory Council
Fall 1998

On the Steel Front
Steel Front Sidebars
Legislative Lookout
Manos Elected Co-Chairman of the Steel Council
Steel At Work: Corrugated Steel Pipe Favored in Infrastructure Projects
Ohio Governor Praises Capital Investments, Public-Private Partnership

Council Calls for Emergency Relief from Unfairly Priced Imports

The Ohio Steel Council has issued an unequivocal warning, noting that the Ohio steel industry could be pushed into a severe and long-lasting recession should unfairly priced steel imports from Russia and Asia continue.

The Council is calling on state and federal elected officials to stop the flood of dumped, underpriced imported steel before domestic steel producers suffer further injury and thousands lose jobs.

"With dumped imports increasing sharply and prices dropping, Ohio steel producers are acutely aware that the steel industry could be headed for a recession. It is no exaggeration to say that we are in a state of alarm," said George Manos, co-chairman of the Council and vice president of business processes at USS/KOBE Steel Co. in Lorain.

In a resolution adopted recently, the Council notes that the U.S. steel industry has invested $50 billion in recent years in new plants and equipment, making it the most competitive and technologically advanced in the world. The U.S. steel industry is also a world leader in recycling, emission controls and safety.

In Ohio, steel producers have invested more than $3 billion in capital improvements in the last five years. The industry employs more than 30,000 Ohio residents.

Still, no industry, no matter how efficient, can withstand a strategy of dumping, where a foreign product is sold below the cost of production for the purpose of preserving local jobs in times of economic distress. Current trade laws were not written in anticipation of an economic collapse of the magnitude occurring in many foreign countries, the Council maintains.

In October, steelmakers and theUnited Steelworkers of Americafiled federal trade cases against dumped and subsidized imports of hot-rolled steel.

"The situation is extraordinary. It requires swift, effective action on the part of our elected leaders," Manos said.

"Now is the time to act, not after the damage is done. Already, layoffs are occurring around the country and orders are falling.

"The U.S. steel industry is vibrant and advanced. It has no need of long-term trade protection. What we're asking for is an immediate response to a crisis situation."

The Council said state and federal government leaders can help the industry by pressuring the Clinton administration to increase enforcement of U.S. trade laws and to take immediate emergency action.
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Steel Front Sidebars

• CSC Ltd.in Warren received a $200,000 grant from theOhio Department of Developmentto train 200 employees in front-line supervision and maintenance as part of the company's $100 million modernization project.
  
  
• WCI Steel, Inc.in Warren recently marked its tenth year as an independent steel company. Since its inception in September 1988, WCI has spent more than $325 million to modernize the Warren plant and build a niche as a custom steel producer.
  
  
• The late Henry Timken, founder ofThe Timken Companyin Canton and inventor of the tapered roller bearing, has been inducted into the National Inventors' Hall of Fame in Akron. His invention solved the problem of friction on turning wheels and shafts.
  
  
• J. Peter Kelly is the new chief executive officer ofLTV Corp., parent of LTV Steel Companyin Cleveland. He replaces David H. Hoag, who will continue to serve as chairman until his retirement Feb. 1, 1999. In addition to his new duties, Kelly will continue to serve as president of the corporation.
  
  
• Republic Engineered Steels, Inc.in Massillon has been acquired by Blackstone Capital Partners II and Veritas Capital Partners. Thomas N. Tyrrell has been elected the new chief executive officer of Republic.
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New Deregulation Bill Could Delay Benefits for 10 Years

Ohio electrical utilities have introduced an alternative to the deregulation bills before the Ohio legislature that would essentially prevent customers from seeing the cost benefits of deregulation for up to 10 years.

The alternative bill introduces a five-year rate freeze and up to a 10-year surcharge on Ohio electric bills, which is intended to recover all stranded costs and other transitional costs for the electric utility companies.

These two provisions together would effectively eliminate the benefits of customer choice and put Ohio steel producers at a disadvantage in competing with companies in other states, according to Marty Suhoza, director of energy management and production materials atLTV Steel Companyin Cleveland and chairman of the Ohio Steel Council energy committee.

"This alternative bill is being introduced very late in the process, and it takes extreme positions on most of the issues. We would ask that the legislators not allow themselves to be distracted by it and that they continue to focus on passing fair legislation this fall," Suhoza said.

There is still hope that the current deregulation bills will come up for a vote this fall, according to Ohio legislators.

The bills, which still need some work in the area of user taxes, were introduced in March by Sen. Bruce Johnson, R-Columbus, and Rep. Priscilla Mead, R-Columbus.

Any further delay in implementing the bills will result in crucial losses for Ohio. The Ohio steel industry, the largest consumer of electricity in the state, uses millions of dollars in electricity daily. Steel producers themselves spend $300 million a year in electricity, while the companies they buy from - many in Ohio - consume an additional $300 million.

The Coalition for Choice in Electricity estimates that Ohio customers are losing, in aggregate, $6 million dollars a day for every day that deregulation is forestalled.

Ohio steel producers are interested in fair legislation that allows all parties involved to benefit from an open electrical market. The Johnson-Mead bill, for instance, contains provisions that would ensure that local schools and communities do not lose tax revenue because of deregulation. According to the bill, taxes presently levied on utility companies - and then passed on to consumers - would be collected directly through a broad-based user tax. That user tax should be based - just as it is now - on a percentage of the price paid for electricity rather than a flat tax per kilowatt hour, according to Suhoza.
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Manos Elected Co-Chairman of the Steel Council

George Manos, vice president- business processes atUSS/KOBE Steel Co.in Lorain, has been elected co-chairman of the Ohio Steel Council.

Manos succeeds Harold V. Kelly, executive vice president atRepublic Engineered Steels, Inc., who served in the position for more than two years. Both Manos and Kelly have been Ohio Steel Council members since the organization's founding in 1991. By law, the other co-chairman of the Council is the director of theOhio Department of Development, who is Joseph Robertson.

Manos, who will serve a two-year term, has been involved in the steel industry for 25 years. Before assuming his present position at USS/KOBE in 1996, he was executive assistant to the president.

He resides in Strongsville, where he serves on the mayor's economic development committee. He is also a trustee of the Strongsville Chamber of Commerce and a member of the Strongsville Board of Education.
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Steel At Work: Corrugated Steel Pipe Favored in Infrastructure Projects

Ohio steel companies are among the producers of steel used in corrugated pipe, which is one of the top-rated products used in infrastructure projects.

Corrugated steel pipe is used in all types of construction, including road building, drainage, storm sewers, culverts, spillways, subdrains, underpasses, conveyor conduits, service tunnels and retention and detention systems.

Listed as a preferred material in building specifications, corrugated steel pipe is superior to other building materials because of its flexi- bility, light weight, strength and durability. It can be manufactured to exact specifications and will accommo- date many types of individual products. Installation is easier, faster and more economical than with other materials.

Corrugated steel pipe is favored especially in stress-intense applications, such as heavy traffic or unstable foundations. The corrugation inherent in its design makes it many times stronger than other construction materials.

"For construction, drainage and infrastructure, corrugated steel pipe is hard to beat. Modern advancements have kept this 100-year-old design well ahead of competing materials. The lightweight steel is available in a wide range of coatings," said Steve Magoon, marketing manager atWCI Steel, Inc.in Warren.

Along with WCI, AK Steel Corp.in Middletown sits on the American Iron and Steel Institute's Corrugated Steel Pipes Committee.
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Ohio Governor Praises Capital Investments, Public-Private Partnerships

Ohio Governor George V. Voinovich praised partnerships involving state government officials and Ohio steel producers during a recent ceremony forThe Timken Company'snew $55 million rolling mill at its Harrison Steel Plant in Canton.

Voinovich also said the Ohio steel industry is continuing to take a leadership role in capital improvements.

Timken's rolling mill was officially commissioned by the governor during a ribbon-cutting ceremony in August. Also taking part was U.S. Rep. Ralph Regula, a Republican from Canton.

"This expansion is an exciting investment in the state of Ohio and in the workforce of this advanced manufacturing company," Voinovich said. "It is continuing evidence of business and government joining together with working men and women to keep Ohio moving forward. It is a testament to Ohio's leadership in the steel industry."

Voinovich appointed the Ohio Steel Council, a public-private partnership designed to strengthen ties among the steel industry, state officials and Ohio citizens.

In the last five years, Ohio steel producers have invested approximately $3 billion in capital investments. They estimate that they will spend in excess of $500 million this year.

Timken's new mill will produce steel with better size and straightness charac- teristics and better surface quality. The plant's capacity is 700,000 tons per year, 25 percent higher than previous capacity.
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