Latest news with #rustbelt
The Guardian
3 days ago
- Business
- The Guardian
‘Another snake-oil salesman's pitch': US workers wary of Trump's steel deal
Donald Trump, once 'totally against' Nippon Steel of Japan's controversial $14bn takeover bid for US Steel, the second largest US steel producer, is now hailing the deal as a turning point for the struggling industry. 'We won't be able to call this section a rust belt any more,' the US president declared at a plant in West Mifflin, Pennsylvania, on Friday. 'It'll be a golden belt.' Workers are not holding their breath as they await details. 'Our members know from decades of negotiating contracts: trust nothing until you see it in writing,' David McCall, president of United Steel Workers, said in a statement last week. And veterans of the sector, which has withered for decades, are dubious. 'This is another snake-oil salesman's pitch to make him look good and reward the billionaires and millionaire executives and stakeholders for US Steel,' said Doug May, who worked for 43 years as a steel worker at a mill in Granite City, Illinois, from the age of 19. 'He's a proven flip-flopper. Just look at his trade cases: on again, off again.' Trump ditched his opposition to the deal – which Joe Biden blocked in January, citing national security concerns – last week, claiming it would create tens of thousands of jobs. At Friday's Pennsylvania rally, the president also announced he was doubling US tariffs on foreign steel to 50%. 'This will be yet another BIG jolt of great news for our wonderful steel and aluminum workers,' he later claimed on social media. As Nippon looks to swoop on US Steel, however, staff are still waiting on clarity. 'Are we still going to be employed when this whole thing goes through, and are there going to be improvements to our plant?' Mikayla Prescott, a worker at the Irvin site where Trump spoke on Friday, told the Pittsburgh Post-Gazette. 'If it's not benefiting the workers,' she added, 'then what's the point?' Following his retirement in 2016, May has followed international trade deals involving steel and watched the negative impacts of foreign steel imports on the US industry. May said the president 'recognized [the] disenchantment and anger' over the decline of the US steel industry but expressed distrust and disapproval of Trump's rhetoric and promises in supporting the deal. While the deal is said to include a 'golden share' that will be issued to the federal government, details have not been disclosed. US Steel has characterized the deal as an acquisition. United Steel Workers, which did not participate in the discussions around the acquisition of US Steel, has noted Nippon Steel has been found to have violated US trade laws in 13 different cases. The union's most recent contract with US Steel, signed in 2022 and set to expire at the end of 2026, represents 11,000 workers at the company. US Steel bought the Granite City plant, where May used to work, out of bankruptcy in 2003. The plant was temporarily idled for months in 2009 due to the recession, the first time in the plant's over 100-year history, and following another idling of the plant in December 2015, US Steel announced in March 2018 it was reopening the plant, citing Trump's 25% tariffs on steel imports. 'We are once again pouring American steel into the spine of our country,' the president, then in his first term, declared at a rally at Granite City. 'You are the ones who are making America great again.' May disputed Trump, or his tariffs, as the reason for the reopening, which he suggested was a result of the cyclical nature of the industry. In 2016, the US Steel chief executive had said the plant was idled due to market conditions and that it would be brought back when conditions improve. 'Granite City was going to start back up anyway,' said May. 'They don't just flip a switch just because Trump came to town.' Despite Trump's promises in 2018 to bring back 'hope and prosperity' to Granite City, problems continued. The plant's blast furnace was idled partially in 2019, then its second was idled in late 2023, which US Steel blamed on the autoworkers' strike at the big three automakers. United Steel Workers argued the decision was a targeted attack on unionized workers. 'If Trump really had steel workers' backs, he wouldn't be making anti-union appointments to the National Labor Relations Board,' May added. 'He wouldn't be decimating Osha [the Occupational Safety and Health Administration]. He wouldn't be doing everything he's done: a long list of things that prove that he's not supportive of unions.' May said: 'The 'partnership' that those at the rally are celebrating, despite scant details of investments being shared, could become your very nemesis in a short period of time. Solidarity with USW leadership and members across the country is critical going forward. Once the shit hits the fan, commitments are unfulfilled, non-union electric arc furnace actions will be used as a contract bargaining weapon and the rally is a forgotten memory.' There is a 'vast difference between public relations and putting commitments in writing', McCall, the USW president, said in a statement last week. 'Issuing press releases and making political speeches is easy. Binding commitments are hard,' he said. 'The devil is always in the details, and that is especially true with a bad actor like Nippon Steel that has again and again violated our trade laws, devastating steel communities in Pennsylvania and elsewhere.' US Steel did not respond to multiple requests for comment on criticisms from United Steel Workers on the deal.
Forbes
27-05-2025
- Business
- Forbes
The Lost Magic Of Manufacturing Employment Never Really Was
Plymouth factory in Detroit, Michigan, 1962. (Photo by Michael) There's a pining for the glory days of manufacturing jobs among some Americans. But the great philosopher Billy Joel sang, 'the good ole days weren't always good and tomorrow ain't as bad as it seems.' We should understand why some well-paying jobs (by yesterday's standards) arose in certain locations and industries, and why new well-paying jobs will arise elsewhere in the future. Manufacturing employment has certainly dropped. Last year's manufacturing job count jobs was one-third lower than the peak level of 1979. Yet just as the decline in farm work for over 100 years did not stymie the economy, the drop in factory employment hasn't hurt the overall economy. Unemployment has fallen from 5.8% in 1979 to just 4.0% last year. Output of factories has more than doubled since 1979 despite the much lower employment level. So we can chalk up much of the change to higher productivity. Wage rates for factory work rose a little faster than inflation over this time period, cumulating to a 20% gain. This is a slower than the overall average for production and non-supervisory work, but growth nonetheless. Why did manufacturing jobs seem to be great? In some regions they contrasted with dismal opportunities elsewhere. A key factor in years past was the importance of location. The 'rust belt' describes a region that was once dominated by the steel industry, its suppliers and its users. Steel is made from iron ore, heated with coal. The southern edge of the Great Lakes had access to the resources, as well as transportation links to customers across the country. Good wages were offered because the area didn't have enough workers for all the production that was best performed in the region. People seldom leave their homes when other opportunities are no better. To induce people to move, wages were increased. The same process occurred elsewhere, such as in the Pacific Northwest forests. People were attracted by high wages to fill jobs in saw mills. Industry concentration with unionization also accentuated the phenomenon of high wage for low-skilled work. The Big Three automakers of the 1950s (General Motors, Ford and Chrysler) faced very little competition. Their union would demand similar wages from each company, so fighting the union offered no competitive advantage for a single company. Higher costs would be passed on to consumers. But other manufacturing industries at this time, such as apparel, were much more competitive. One company's negotiated union agreement would not be applied to other companies. And instead of just three main producers, apparel had myriad small, medium and large companies. Apparel also could be made in less capital-intensive factories, which led the industry to shift to wherever wages were lower. New England and New York City's garment district lost jobs to low-wage regions in the south. At the same time, car factories paid much higher wages. So high wages for low-skilled work is not a characteristic of manufacturing in general, but of certain times and certain places. The decline of Rust Belt manufacturing jobs began with foreign car competition. Americans learned that Volkswagens offered reliable transportation at a low price. Then Toyotas, Datsuns and Hondas offered good value from both low prices and fuel efficiency. The Big Three's union contracts—which included high wages as well as complicated work rules—placed them at a disadvantage in a competitive market. Although that disadvantage led to fewer high-wage jobs, American consumers benefited from cars that cost less and had fewer defects. Economic development efforts of many states and cities continued to lure manufacturers, hoping to add high-wage jobs for low-skilled workers. But competitive industries offered higher wages only for skills or to induce workers to do dangerous or unpleasant work. The willingness to move for a job has fallen. In the 1960s, about 6.2 million people per year would move from one state to another. Recent figures are down to 4.5 million people, despite a larger population. Why would people be less willing move now? Unemployment is lower, so that impetus has dropped. Social safety nets have increased, so people are in less desperate straits. And the population has aged, with older folks less likely to move than people in their 20s and 30s. With lower mobility, companies shift work to where potential workers already live. This is easier to do with a more service-oriented economy and where the manufacturing does not benefit so much from location. Automobile plants today are located far from the Rust Belt, including Texas, Mississippi, Alabama and Georgia. The competitive process in our economy is complicated. Businesses and workers weigh the advantages of location as well as the effects of wage changes. Company leaders hoping for a stronger economy should not expect much benefit from the current push for manufacturing in the United States. Trying to ride a dying wave will yield far less than focusing on customer satisfaction, production efficiency and long-run employment strategy.
