A leaner and meaner American steel industry is emerging from three years of belt-tightening, plant closings and improvements in productivity, the chairman of the American Iron and Steel Institute said today.
But Donald H. Trautlein warned at the steel industry's annual meeting that strict enforcement of President Reagan's program to restrict imports and a pickup of the economy are needed to allow U.S. steel makers to begin making profits again after three years of deep losses.
Trautlein, head of Bethlehem Steel Corp., the nation's third-largest steel maker, said it is unlikely the industry will show a profit this year, although second-quarter figures could nudge into the black after first-quarter losses.
Nonetheless, he sounded an optimistic tone at a meeting occuring the week after LTV Corp., the number two steelmaking company, announced the closing of its giant Aliquippa, Pa., mill with the loss of 1,300 jobs.
"There's no question the industry has been liquidating itself, and at a horrendous rate," Trautlein said.
Adding to the gloom, Sen. John Heinz (R-Pa.) warned earlier today of the trend toward a deindustrialization of America, a move he said needed to be stopped.
"I am here to report to you that there is an American steel industry in our future," Trautlein said. "A leaner American steel industry, for sure. But also a smarter, stronger and more competitive American steel industry." He pointed to lower costs -- down as much as 20 percent in the past two years -- and increased productivity.
Trautlein acknowledged that some of the productivity gains had been achieved at the cost of jobs and plants -- "closing of marginal or obsolete production facilities." But he added that steelworkers who agreed to relaxations of work rules deserved a big part of the credit.
The twin clouds hanging over the steel industry's future, he said, are an economic downturn, which could cause more large-scale plant closings, and increased imports, which Trautlein blamed for the "financial bloodbath" of the last three years.
Repeating a steel industry theme, he added that the United States "is the world's prime target for economic aggression" by other countries, especially newly industrialized nations of the Third World, which are building their manufacturing base at the expense of American industries through "state-owned and directed enterprises."
Trautlein read a letter from President Reagan pledging that his administration would strictly enforce import limits, which he said could drop foreign steel coming into this country to 18.5 percent of domestic consumption. Most estimates, however, set imports at a slightly higher level once the president's program is fully implemented, as new suppliers try for a piece of the U.S. market, the world's largest.
Trautlein said U.S. steel makers need to spend $5.2 billion a year over the next five years to finish modernizing facilities, and tax breaks in the new reform package are needed to achieve that aim.