Arcelor-Mittal is the world’s largest steel maker. Its operation in Cleveland is often touted as the company’s most productive, producing 1500 tons per employee – well above the standard of 1000 tons per employee for advanced steel making enterprises.
I recently heard Lou Schorsch speak about ArcelorMittal’s plans for Cleveland. Schorsch is Executive Vice President of ArcelorMittal and President/Chief Executive Officer of the company’s Flat Carbon Americas business unit. This role includes responsibility for slab, hot rolled, cold rolled and coated sheet and plate produced at operations in Canada, the United States, Mexico and Brazil. In 2012, Schorsch keynoted WIRE-Net’s “Making It Here: Energy & Manufacturing Conference”, discussing ArcelorMittal’s work in the energy sector, and its gains to reduce the corporation’s carbon footprint. Schorsch discussed ArcelorMittal’s investment plans in Cleveland, what it will take for a true resurgence of American manufacturing, and some of the key issues facing both ArcelorMittal and all US based manufacturing.
Arcelor will invest $70 million in their Cleveland facilities in 2013, all aimed at securing the Cleveland works’ reputation as a top producer of flat rolled steel. The Cleveland plant serves diverse markets including automotive, steel service centers and converters, plate slabs and tubular applications. The company is moving ahead to restart its mill on the west side of the Cuyahoga River, a mill that is well suited to batch production. ArcelorMittal plans a $25 million investment in new technology to help grab more of the emerging market for light weight, high strength steel.
Schorsch also said that ArcelorMittal’s success could be a template for other manufacturing companies:
· create distinctive products,
· invest in research & development, and
· build a culture of shared interests among all employees.
He also pointed to four serious policy challenges that will create roadblocks to manufacturing’s comeback:
1) Trade: this is a serious issue for all companies working in global markets, particularly in steel, where Asian producers benefit from currency manipulation, non-tariff barriers, minimal environmental and safety regulation and other subsidies that are not present either in the US nor in Europe.
2) Education: companies can’t wait for smarter government policy to help create the technical talent they need. ArcelorMittal isn’t waiting either, and has created the Steelworker for the Future program, working with area community colleges and career-tech high schools like Cleveland’s Max Hayes, to fill the pipeline of talent they need.
3) Infrastructure: ArcelorMittal handles a lot of tonnage each year, shipping 3 million tons out of Clevealnd, while receiving 5 million tons of raw material per year. They depend on modern infrastructure: roads, rail and shipping. You know they are concerned when US infrastructure is rated D+ overall and D- for waterways. Investing in better infrastructure is a shared good of our industrial commons, and also creates a lot of good jobs in the process.
4) Tax: most of the chatter in Washington DC seems basically aimed at advantaging Wall Street, and companies who sell here, to the disadvantage of companies who make things in the US. There is a push on to close key “loop holes” that benefit American producers, like accelerated depreciation.
Asked to dig in to the most important of these 4 challenges, Schorsch targeted tax policy as the lynchpin. Tax reform should ensure that our producing sector is strengthened, not undermined. Wall Street is doing its best to protect its interests to the detriment of US based manufacturing.
