Steel industry, history

The History of Steel Industry is the basic history of the world's industrial economy since the 1860s.

Pre-1800

Arnoux, (2001) shows how in mining and the metallurgical industry, the process of technical innovation and the growth of demand in the period 1450-1550 made possible the emergence of new types of production and commercialization, as happened in the iron-making industry with the diffusion of Walloon processes throughout northwestern Europe. The mechanization of the forge resulted in rising production of iron and steel for the interregional and international markets, an increasing use of wood, and a global process of salarization of the iron-workers. The growing authority of the forge masters over the workers in smelting and hammering plants signals the development of forges as industrial firms. This process was accompanied by strong intervention on the part of the state and other public institutions by way of orders, patents to protect innovations, and even state-owned industrial factories.

Britain

Since 1945

Blair (1997) uses the history of the British Steel Corporation (BSC) since World War II to illustrate the problem of government intervention in a market economy. Following the war it was difficult to persuade iron and steel companies to upgrade their plants despite the fact that the industry had followed a patchwork growth pattern that needed to be rationalized to improve efficiency in the face of world competition. In 1946 the first steel development plan was put into practice with the aim of increasing capacity, and the Iron and Steel Act of 1949 led to nationalization of the industry, but these measures were undone by Conservative governments in the 1950's. In 1967, under Labour control, the industry was again nationalized. But by then twenty years of political manipulation had left companies such as BSC with serious problems: a complacency with existing equipment, plants operating under capacity (low efficiency), poor quality assets, outdated technology, government price controls, higher coal and oil costs, lack of funds for capital improvement, and increasing world market competition. By the 1970's the government adopted a policy of keeping employment artificially high in the declining industry, and this was especially difficult for BSC as it was a major employer in a number of depressed regions. Eventually, in the 1980's BSC was re-privatized as British Steel. Under private control the company has dramatically cut its work force and undergone a radical reorganization and massive capital investment to again become competitive in the world marketplace.

British Empire

In Australia, the Broken Hill Propriety Company Limited's (BHP's) Newcastle Iron and Steel Works was a major mill from its commissioning in 1915 and its closure in 1999. McIntyre (2005) looks at the boilermaker, his history and culture, his task, and the steelworks. Drawing on historical method, cultural studies, and social theory, McIntyre explores the world of the steelworks boilermaker as a species of industrial man, including the ideas, values, symbols, and practices which shaped his expectations, outlook, and actions as a skilled industrial worker

Germany

World War II

In Nazi Germany prisoners of war provided the main source of French forced labor at the beginning of World War II. The Germans turned also to the civilians in countries they had conquered to increase the labor force, notably in the metalworking industries, as early as autumn 1940. However, the lack of volunteers led the French government to introduce a law in September 1942 effectively deporting French workers to Germany, where, by August 1944, they constituted 15% of the labor force. While the proportion of French workers in civil and military positions reached its peak by 1943, they nevertheless maintained a significant presence in the steel- and ironworks, the largest number working in the giant Krupp works in Essen. Low pay, long hours, and often miserable living conditions in which poor housing, insufficient heating, and limited food supplies were frequent, combined with harsh discipline and inadequate medical facilities, became more prevalent by the end of the war.

Other Europe

In Spain, iron and steel wire manufacturers provided a wide and heterogeneous range of products for agriculture, mining, and several industries (paper, flour products, and machinery) during the process of Spanish industrialization. Fernández Pérez, (2005) provides new data on the growth of this auxiliary sector for the years 1856-1935, a period that has been neglected in research on Spanish metallurgy. Of particular importance are data about Spanish iron and steel wire manufacturing workshops and factories and imports and exports. Topics addressed include technological change, geographical location, the entrepreneurial structure of this sector, collusive agreements, and the institutional environment.

Only by studying how enterprises worked in practice can the conditions undermining the economic system of socialist Yugoslavia be understood. The case of Metallurgical Kombinat Smederevo, a huge iron and steel enterprise that ran massive deficits, had low productivity, and saddled the republic of Serbia with foreign debt, is illustrative. The enterprise's losses resulted from an unbalanced production structure, its location and lack of access to raw materials, an inability to construct an efficient plant, service machinery, or manage spare parts inventories, and an orientation toward unprofitable exports. Because no one had the responsibility and incentive to improve efficiency the country continued to be saddled by its losses.

Asia: Japan, India, China

The Indian steel industry began expanding into Europe in the 21st century. In January 2007 India's Tata Steel made a successful $11.3 billion offer to buy European steel maker Corus Group PLC. In 2006 Mittal Steel (based in London but with Indian management) acquired Arcelor for $38.3 billion to become the world's biggest steel maker.

United States

In the United States the central figure was Andrew Carnegie, who made Pittsburgh the center of the industry. He sold his operations to US Steel in 1901, which became by far the dominant corporation for decades.

Carnegie

Carnegie's great innovation was in the cheap and efficient mass production of steel rails for railroad lines.

In the late 1880s, Carnegie Steel was the largest manufacturer of pig iron, steel rails, and coke in the world, with a capacity to produce approximately 2,000 tons of pig metal per day. In 1888, he bought the rival Homestead Steel Works, which included an extensive plant served by tributary coal and iron fields, a 425-mile (685 km) long railway, and a line of lake steamships. A consolidation of Carnegie's assets and those of his associates occurred in 1892 with the launching of the Carnegie Steel Company.

By 1889, the U.S. output of steel exceeded that of the UK, and Andrew Carnegie owned a large part of it. By 1900, the profits of Carnegie Bros. & Company alone stood at $40,000,000 with $25,000,000 being Carnegie's share. Carnegie's empire grew to include the J. Edgar Thomson Steel Works, (named for John Edgar Thomson, Carnegie's former boss and president of the Pennsylvania Railroad), Pittsburgh Bessemer Steel Works, the Lucy Furnaces, the Union Iron Mills, the Union Mill (Wilson, Walker & County), the Keystone Bridge Works, the Hartman Steel Works, the Frick Coke Company, and the Scotia ore mines. Carnegie, through Keystone, supplied the steel for and owned shares in the landmark Eads Bridge project across the Mississippi River in St. Louis, Missouri (completed 1874). This project was an important proof-of-concept for steel technology which marked the opening of a new steel market.

US Steel

See also US Steel

By 1900 the US was the largest producer and also the lowest cost producer, and demand for steel seemed inexhaustible. Output had tripled since 1880, but customers, not producers, mostly benefitted. Productivity-enhancing technology encouraged faster and faster rates of investment in new plants. However during recessions, demand fell sharply taking down output, prices, and profits. Charles M. Schwab of Carnegie Steel proposed a solution: consolidation. J. P. Morgan and Elbert Gary led the team that worked with Carnegie and Schwab to create United States Steel, bt far the largest non-railroad corporation in the world in 1901.

US Steel combined finishing firms (American Tin Plate, American Steel and Wire, and National Tube) with two major integrated companies, Carnegie Steel and Federal Steel. It was capitalized at $1.466 billion, and included 213 manufacturing mills, one thousand miles of railroad, and 41 mines. In 1901, it accounted for 66% of America's steel output, and almost 30% of the world's. During World War I, its annual production exceeded the combined output of all German and Austro-Hungarian firms.

After 1970 the company could no longer compete effectively with low-wage producers elsewhere. Iports and mini-mills undercut its sales. It went into oil then was spun off in 2001. Finally US Steel reemerged in 2002 with plants in three American locations (plus one in Slovakia) that employed fewer than one-tenth the 168,000 workers of 1902.

Bibliography

• Bernal, John Desmond, Science and Industry in the Nineteenth Century, Indiana University Press, 1970.
• Blair, Alasdair M. "The British Iron and Steel Industry since 1945." Journal of European Economic History 1997 26(3): 571-581. Issn: 0391-5115
• Burn, Duncan. The Steel Industry, 1939-1959: A Study in Competition and Planning (1961)
• Duncan Burn; The Economic History of Steelmaking, 1867-1939: A Study in Competition. Cambridge University Press, 1961 online version
• J. C. Carr and W. Taplin; History of the British Steel Industry Harvard University Press, 1962 online version
• Anthony P.D’Costa; The Global Restructuring of the Steel Industry: Innovations, Institutions, and Industrial Change London: Routledge, 1999 online version
• Harukiyu Hasegawa; The Steel Industry in Japan: A Comparison with Britain 1996 online version
• Krass, Peter. Carnegie (2002). ISBN 0-471-38630-8.
• Livesay, Harold C. Andrew Carnegie and the Rise of Big Business, 2nd Edition (1999). ISBN 0-321-43287-8.
• Landes, David S., The Unbound Prometheus: Technical Change and Industrial Development in Western Europe from 1750 to the Present 2nd ed. Cambridge University Press, 2003
• Misa, Thomas J. A Nation of Steel: The Making of Modern America, 1865-1925 (1998)
• Nasaw, David. Andrew Carnegie (2006), teh standard biography.
• Norman J. G. Pounds and William N. Parker; Coal and Steel in Western Europe; the Influence of Resources and Techniques on Production (Indiana University Press, 1957) online version
• H. Lee Scamehorn; Mill & Mine: The Cf&I in the Twentieth Century University of Nebraska Press, 1992 online version
• Scheuerman, William. The Steel Crisis: The Economics and Politics of a Declining Industry (1986)
• Geoffrey Tweedale; Steel City: Entrepreneurship, Strategy, and Technology in Sheffield, 1743-1993. Oxford University, 1995 online version
• Wall, Joseph Frazier. Andrew Carnegie (1989). ISBN 0-8229-5904-6.
• Warren, Kenneth, Big Steel: The First Century of the United States Steel Corporation, 1901-2001. (University of Pittsburgh Press, 2001) online review
• Whaples, Robert. "Andrew Carnegie", EH.Net Encyclopedia of Economic and Business History.
• U.S. Steel's History of U.S. Steel
• Urofsky, Melvin I. Big Steel and the Wilson Administration: A Study in Business-Government Relations (1969)

Labor

• Brody, David. Labor in Crisis: The Steel Strike of 1919 (1965)
• Mary Margaret Fonow; Union Women: Forging Feminism in the United Steelworkers of America University of Minnesota Press, 2003 online version
• Mcintyre, Dennis. "Making and Remaking the Boilermaker at the Newcastle Steelworks, 1915-85." Labour History [Australia] 2005 (89): 215-224. Issn: 0023-6942 Fulltext: History Cooperative
• Warne, Colston E. ed. The Steel Strike of 1919 (1963) primary and secondary documents

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