Steel Industry wants $, too

Get in line; socialism starts here. As Jimmy Durante used to say, everybody wants to get into the act.

Dilip Vishwanat for The New York Times

The Granite City Works U.S. Steel mill in Granite City, Ill., cost more than 2,000 people their jobs when it closed.

The steel industry, having entered the recession n the best of health, is emerging as a leading indicator of what lies ahead. As steel production goes — and it is now in collapse — so will go the national economy.
How so?

That maxim once applied to Detroit’s Big Three car companies, when they dominated American manufacturing. Now they are losing ground in good times and bad, and steel has replaced autos as the industry to watch for an early sign that a severe recession is beginning to lift.

Is manufacturing still that significant in the modern US economy? According to the CIA World Factbook, industry is 19.8% of the US economy.

The industry itself is turning to government for orders that, until the September collapse, had come from manufacturers and builders. Its executives are waiting anxiously for details of President-elect Barack Obama’s stimulus plan, and adding their voices to pleas for a huge public investment program — up to $1 trillion over two years — intended to lift demand for steel to build highways, bridges, electric power grids, schools, hospitals, water treatment plants and rapid transit.

Well, as Bill Gross wrote in his Investment Outlook column in July 2008, the government will have to fill the vacuum created by reducing corporate and consumer spending. Gross: This economy will need an additional jolt of $500 billion or so of government spending real quick. It must replace both reduced residential investment and consumption whose decline has placed the U.S. economy near, if not in a recession. Of course, now we know the economy was already in recession.

“What we are asking,” said Daniel R. DiMicco, chairman and chief executive of the Nucor Corporation, a giant steel maker, “is that our government deal with the worst economic slowdown in our lifetime through a recovery program that has in every provision a ‘buy America’ clause.”

Good thought. Naive, perhaps misleading, but a nice thought.

Steel goes into nearly everything made in America, from homes and office buildings to cars, appliances and light bulb sockets, and as construction and manufacturing wound down, so did the output of steel, plunging 50 percent since September.

It must be kept in mind that, as the CIA World Factbook points out, the US industry is 79% services. So construction is not going to do much for a large part of the national economy. While construction works are needed, while the infrastructure of many parts of the nation could do with being fixed, even replaced, that in itself does not appear to be the most pressing need is: confidence, credit, a floor under house prices.

The cutback has been particularly hard on workers at the big integrated mills like those at U.S. Steel and Arcelor Mittal USA, with their blast furnaces and coke ovens converting iron ore and other materials into steel. Operated at less than full capacity, these mills are less efficient than the equally large “minimills,” like Nucor, whose electric arc furnaces can be operated efficiently at lower speeds.

Underwire and steel: two obits

In the newspaper itself, the Wall Street Journal had equal-sized headlines for the two obits; in the website, the Magidson obit had a smaller headline. I find her the more interesting of the two, though Boni has his own interesting facets.

After finding success manufacturing underwire bras, Shirley Magidson became a leading Southern California social activist.

An interesting juxtaposing of her life's details. She hand her husband, both Carnegie-Mellon grads, moved to California and set up shop in Los Angeles as Metric Products Inc. and at first manufactured wire axles that Mattel Inc. used to attach wheels to toy cars and balsa-wood airplanes. A contract from Helene of Hollywood, a competitor to Maiden Form Brassiere Co., brought a big order for underwires.

In addition to design, the Magidsons shared a passion for social justice, and their Beverly Hills home became a meeting place for progressive leaders. Dr. Martin Luther King Jr. stayed at their home shortly before he was assassinated, family members say. In his memoir "Spock on Spock," Dr. Benjamin Spock, a close family friend, wrote: "If anybody was in charge of the opposition to the war in Vietnam, it was Herb Magidson."

They were involved in more than civil rights: The family held fund-raisers for the Black Panthers, the Berrigan brothers, Daniel Ellsberg and numerous activist causes.

In 1980, Mrs. Magidson helped to found the Southern California branch of Physicians for Social Responsibility, the antinuclear group that shared a Nobel Prize for Peace in 1985. As a leader of the group, Mrs. Magidson journeyed to Stockholm for the awards ceremony. She also was part of a delegation to Peru to visit Lori Berenson, an American prisoner who became an international cause célèbre.

Mrs. Magidson studied Zen Buddhism in Los Angeles, became adept at flamenco dancing and doted on her grandchildren. In recent years, she had a hit with a sleep mask she patented.

Quite peripatetic. Boni was much more staid.

After receiving a doctorate at Carnegie Institute of Technology, Mr. Boni spent his entire career with Armco, based in Middletown, Ohio. He had a sheaf of patents for improved manufacturing processes and coatings. He was fond of citing a quotation attributed to Charles Kettering, GM's legendary head of research: "I have never heard of anyone stumbling on something sitting down."

Staying with one company wasn't unusual in mid-20th-century America. Yet he, too, had another side:

A man of diverse interests, Mr. Boni played drums in a touring Dixieland band as a teen, and taught himself cello. He attended a writing seminar at Kenyon College and published books of poetry. As he struggled in the past year with the leukemia that killed him July 1 at age 80, he put the finishing touches on a novel, his second. Titled "Why War?," it follows the fates of three young American soldiers in World War I.

"He was in the process of examining the meaning of life and facing death," his daughter, Leslie Boni, says. "It became so painful to him that we were at war."