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USA Steel Now A World Competitor May 13, 2008

Posted by tkcollier in Economy & Business.
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Steel once again a hot commodity – USATODAY.com
The infamous”sucking sound ” , blaming NAFTA for lost jobs, is actually the sound of innovation, driven by World competition. Some of the biggest changes occurred in 2002, when financier Wilbur Ross began forming International Steel Group. Amid a steel depression, ISG gradually bought some of the nation’s top steel mills, starting with LTV and then Bethlehem Steel, Weirton Steel and Georgetown Steel.

Labor contracts were amended. Costs were driven down. And mills were modernized. Now, across the nation’s steel industry, 160,000 employees produce 110 million tons of steel a year, says the American Iron and Steel Institute. In 1970, it took 500,000 workers to make 91 million tons. “The industry is better,” Halpert says. Such efficiencies have made producing steel more profitable, he says.

Steel exported from the USA, thanks to the dollar, is competitive even in nations with lower-cost steel production, he says. Meanwhile, the weak dollar is making U.S. steel companies irresistible buyout targets for foreign steel companies.

European, Brazilian and Russian companies have been gradually buying the USA’s steel companies. In 2005, for instance, Netherlands-based ArcelorMittal bought ISG and is now the largest steel company in the world. Russian steelmaker Evraz bought Oregon Steel Mills in 2006. More than half the nation’s steel mills are owned by foreign companies, Parr says, up from 5% a decade ago.

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