Tuesday, August 9, 2016

Megalomania brought steel down and wants to bring it back

A Trump Administration will also ensure that we start using American steel for American infrastructure. Just like the American steel from Pennsylvania that built the Empire State building.It will be American steel that will fortify American's crumbling bridges.It will be American steel that sends our skyscrapers soaring into the sky.It will be American steel that rebuilds our inner cities. 
The American steel worker in 1956 (SUN photo)
It will be American hands that remake this country, and it will be American energy - mined from American resources - that powers this country. It will be American workers who are hired to do the job. We are going to put American-produced steel back into the backbone of our country. This alone will create massive numbers of jobs. (Donald Trump)
Sparrows Point Steel Mill 1956: Back to the future? (SUN photo)
When I heard this yesterday, I wondered if Baltimore's former steelworkers who labored in Sparrows Point would believe this. There were 30,000 of them in 1959 and 1,970 of them in 2012.

Or if Arcelor Mittal would believe this, the world's largest steel producer, headquartered in Luxembourg with steel production in 60 countries (including at one point Sparrows Point before it was ordered to sell the plant to comply with anti-trust laws). Now the company has no steel production in the US (its North American operations are located in Canada).

There are plenty of reasons why American Steel isn't strong anymore and some of them you can hear Mark Reuter tell on the RealNews. Fact is, in 2012 Sparrows Point was done with a glorious history of steel making that had lasted 120 years, and the reason that it was over wasn't NAFTA and it won't be TPP. American Steel went down for many of the same attitudes exhibited by the American auto industry and later the financial industry and by Donald Trump himself: Megalomania, arrogance, too impressed by its own size, its own might and ultimately unable to adjust nimbly to changing conditions and the future. Bosses in management and bosses in labor had a quaint deal and both profited for too long from the status quo. Until that wasn't good enough anymore. At Sparrows Point then came the liquidators, folks who sucked out the last few dollars that were to be made from auctioning off the outdated stuff . Out for the quick buck, not the long-term perspective. Workers shed aside like used Kleenexes.

The blast furnace is being blasted to pieces in 2015. (SUN photo)
Today Sparrows Point is called TradePoint Atlantic and its managers are putting in anybody who wants to be there. 

The newcomers may soon employ more workers than RG steel did before it went bust. But those are not high paying jobs performed by highly qualified workers. A FedEx warehouse, a Harley Davidson training center, Pasha Automotive, they all employ entry level workers, many of them with minimum pay. The nearby Amazon fulfillment center is a harbinger of that new world. It employs 3,000 employees. The plan for TradePoint Atlantic is for 10,000 employees in the next ten years. However, many of these jobs could be threatened by robots who could easily wipe out a large part of the current workforce. Robots are already slowly phased in Amazon.

10,000 wouldn't be bad for a labor market flooded with low skill workers, but it is not what Trump is dreaming about or, in fact, promising. Back to the future, a red hot steel mill giving work to 30,000 Americans won't happen. Not here and not anywhere else. Trust me!

Klaus Philipsen, FAIA