How Stubbornness Killed US Steel

[@TheHustleChannel]

Get the Business Ideas Database ➡ clickhubspot.com/ege

[@robertlackey7212]

Your miissing a other side , I was in America about 27 years ago and I had a small manufacturing buisness and all of a sudden all the suppliers of A-588 steel hit me with a $70,000 dollar miniumum order AND a $1500 charge to write a receipt ! I told one of the steel sales men "your putting me out of buisness" and he said "we are doing this specifically to put small companies like yours out of buisness" It was not just steel , but steel was the worst.

[@Stszelec01]

Again marx was right free market is autopathological

[@stellviahohenheim]

​@@Stszelec01Marx was right? Show me the proof of his system working, I'll wait.

[@Stszelec01]

@stellviahohenheim show me capitalist country where there is no authopathology of capitalism I'll wait

[@kogorun]

​@@Stszelec01Better a pathological market then a pathological country that spreads its' rot in everything from steel nails to young minds.

[@nnelg8139]

​@@stellviahohenheim Even if Marx's solution failed to materialize, doesn't mean the problems he was attempting to address aren't real.

[@brianperry4754]

You should contact the office at NUCOR...They absolutely love showing off their facilities. Especially since you aren't doing a hit piece and you can really emphasize their recycling process. Give them a call.

[@mattman85]

Was gonna comment the same thing. Tour groups are a very regular occurrence at nucor and vulcraft facilities.

[@insylem]

I'm building a control panel for Nucor at work

[@TheKarinTS]

I tried! Took a long time to get in touch and couldn't get something organized within our production schedule. Convincing them to let us go take a peek on-camera would've taken a while, which I get - companies are hesitant to work with nosy journalists with cameras even if we promise we're not doing a hit piece haha.

[@mattman85]

@@TheKarinTS I could understand that. I would still recommend trying to get some tours even if you can't bring a camera. Depending on where you're at, you could potentially tour a mill, sheet plant, bar stock, detailing, and/or joist manufacturing facility. It really made me look at buildings differently. They also have their own promotional media that you could ask to use if you ever do a follow up.

[@CraigerAce]

Just a few years ago I met a man who once worked for US Steel. He started working for them around age 20. He retired 18 years later at age 38. Not put on disability, he retired. He was supposed to retire at 20 years, but for a reason I don’t remember, it was 18. I lost that part of the conversation because I was so focused on the fact that he retired at 38 and that he was then 94 years old. Yes, 94. And had COL increases along with 100% paid medical insurance all those years. You can imagine my reaction.

[@tomtxtx9617]

When a big company restructures/downsizes and they have a pension plan, it's not uncommon for workers to get a buyout offer which includes early access to drawing the pension, in exchange for a lower pension payout.

[@CraigerAce]

@@tomtxtx9617 Thank you. I was aware of such plans but decided not to speculate in my comment. You're more than likely correct. Peace. Out.

[@eitkoml]

Such pensions did not disappear, they were stolen. The pensions that you and I are owed instead go into the hands of the 1% who never do any real work, physical or mental. Btw, executives don't do any real work. The closest they come to that is handing work off for others to do.

[@thecrackin-u8p]

64 years is crazy 😂

[@billmitchell2080]

In order to retire as a contract employee you must reach a rule of 85. Which is a combination of years of service and age. If you are 55 with 30 years of service you can retire, with a reduced pension and healthcare coverage. The healthcare coverage is only for the rest of the contract retired under. Any of these stories about union steelworkers living on easystreet after a wonderfully short working career is propaganda. I know first hand, many of my coworkers retired in their mid to late sixties with many health difficulties from the environment and working conditions one has to deal with in an integrated mill. Anyone who retired with less than twenty years was likely a manager, or one of a handful out of tens of thousands employees.

[@jeffreypierson2064]

7:12 Sunk cost fallacy... Just because you have spent a lot of money in the past, doesn't change what you should buy in the future. US Steel could have created Basic Oxygen or Electric Arc refineries and shifted employees to work there. They chose not to do the rational step of buying the future.

[@davidkreimer2970]

There's a new kid on the block...using elemental hydrogen and iron ore. Burn the hydrogen in a retort with iron ore and you wind up with...steel. Nop coal. No limestone. We'll see. Armco Steel in Hamilton Ohio is involved.

[@GregConquest]

Well, unions did push for retention of workers and continued use of old systems. So, US Steel's corporate self-interest was running against both unions and it's own complacency.

[@johnjingleheimersmith9259]

@@GregConquest lol they had plenty of time and power to make their own decisions if they truly wanted to. Union power was only ever significant for a very short period of time. Though the decline has been slow and drawn out, for most of the past several decades union opposition has been little of an obstacle to executive authority.

[@MetaView7]

and then they blame the Chinese for everything.

[@BenjaminCronce]

The irony.. pun? of the sunk-cost fallacy for many situations is they don't understand sunk costs. It's an investment. I can purchase a car and use it to save me money by not paying large amounts for public transportation in the country side, but at some point it's cheaper to replace the car again when it's outlived its use. The less clear case is when you haven't paid off the sunk-cost and trying to determine if the opportunity cost of holding on to the original investment is worth it.

[@mindreader]

I am old enough to have lived through all of this and been distraught as the industry fell apart in the 1975s. I never completely understood why this happened. Thank you for the explanation. It should be sold to the Japanese. I believe it would bring some jobs back to the US. Thank you.

[@TheKarinTS]

I'm young enough to have been completely oblivious but, after reading incessantly about it for a month, can understand a fraction of how devastating this must've been for many Americans. Thanks for watching!

[@jonathanjones3126]

The companies didn't adapt better tech and the unions wouldn't let them get rid of the excess workers.

[@mindreader]

@@jonathanjones3126 Similar to the recent potential dock strike, the union wouldn't accept new technology that would reduce employment, and I imagine the harbors are not being run as efficiently as others around the world. It's always complicated. Elon Musk is controversial, but SpaceX makes Boeing and NASA look bloated and poorly run.

[@jonathanjones3126]

@mindreader nasa doesn't build anything really just hand out contracts. Boeing destroyed itself with penny pinching managers who cut corners until their was nothing left

[@russellbruney1997]

True look it up ​@@mindreader

[@richmiller9844]

As a former Union Steel Worker I couldn't agree with you more. They FEARED change!

[@ronblack7870]

unions always oppose change unless it employs more union members. look at the recent east coast port strike. they want to eliminate any automation. unions need to learn if they oppose modernization that eventually the entire company dies and they lose all the jobs.

[@giantninja9173]

⁠@@ronblack7870well automation leads to cutting jobs and skilled labor and the union dissolves as a result anyways because nobody is hiring for that job anymore. May as well lobby for yourselves cause the gravy train is coming to an end either way.

[@Nphen]

@@giantninja9173 Before NAFTA was even signed, the political leadership of the US, EU, Canada, and Mexico knew that all their various governments would need to coordinate massive programs to ensure Mexican farmers and American factory workers didn't totally lose out. Instead, we got mass migration, wiping out skilled trades & factory unions alike in the US. After the 2008 crisis, a massive infrastructure rebuild was suggested. We got less than half. Now half the workforce retired and the rest are sick & disabled. America needed to plan for automation & economic change. We need healthcare, education, and housing. Instead we get quarterly profits and the few who have lots of stocks or land or a business are wealthy.

[@tomtxtx9617]

​@@ronblack7870 Yep. Unions would do better at working for retraining and expansion to keep workers employed, not at stopping automation. Eventually automation will come, as the coal workers have seen over the past 100 years - by fighting automation, Union members are ensuring they will be left by the side of the road one way or another. Yes, I've had family members working in coal mines and part of UMWA, others at UAW, Teamsters, etc. When done right, Unions are great - essential for workers to have enough power for a seat at the table and can offset the often overwhelming power of Capital. When Unions are mobbed up or otherwise compromised, they're not. Germany has a great model for unions - the Union generally gets seats on the company Board of Directors.

[@eitkoml]

Why didn't they consider it to be critically important to keep up on the latest technology? If you don't keep up with the changes you get replaced like the horse breeders and stagecoach drivers were.

[@brianmee5398]

Interesting to note that the allies did the demolition of aging steel mills in Germany and Japan so that they were able to modernize.

[@Comm0ut]

Got a source for that? Most German (and Japanese) industry was destroyed by 1945. One difference is Germans and Japanese are famous for caring about quality and efficiency. Marshall Plan aid won those conquests to Western-style economics but it was THEIR workers who did the actual rebuilding of their countries. Easy to see why since German and Japanese factories in the US are also highly productive using American workers. The US had plenty of money but ignored modern concepts of quality (W. Edwards Deming is a hero in Japan but was ignored in the US for much longer). American businesses exist only to enrich stockholders, not preserve anything long term.

[@brianmee5398]

My point was only that those countries had no option to continue with old tech since it was destroyed.

[@blub5117]

The funny thing is that germanys steel production didn't decline during the war. The cities where destroyed but the steel production was protected by aa and put underground and suffered little to no damage, so what's your point? 1939 23kt 1943 20kt 1944 19kt

[@TucsonBillD]

In addition, American steel producers were making huge profits during World War II and instead of investing in newer technologies, they used the money to pay investors. So, Germany and Japan rebuilt their steel industry with newer technologies using mainly U.S. investment.

[@NeoHellPoet]

​@@blub5117am I crazy because the numbers you posted show the exact opposite of what you're saying. Plus, wartime steel production wasn't limited to Germany itself. They made steel in France, the low countries, Czechoslovakia, Poland and the Baltics as well as in East Prussia and East Germany. For obvious reasons those stopped being available after the war.

[@TheNacropolice]

As I gather, it is very much similar to what happened with the UK around the 19th/20th century. They were the first to industrialize, and given their massive navy and overall power they: - Had a captive market (colonies) - Could force, via their military, others to accept their terms Interestingly, overtime they became very much pro free trade. Other nations, namely Germany, greatly caught up and then surpassed them in both quality and quantity. How did the British react? Force a "made in Germany" label. The thinking was that it would turn people off, wrong. It became a label of quality as the German steel was superior. This is very much analogous to "Made in Japan" being a hallmark of quality. If your car is "Made in Japan" you know VERY WELL that it is probably super reliable. TLDR: Sitting on laurels, not investing in new tech, etc.

[@spvillano]

Actually, Made in Japan was a joke throughout the US in the 1960's and 1970's, until quality control became a major focus in Japan. Then, it became a hallmark of excellence. Well, other than the "famous Japanese disappearing grease" used in VCR's...

[@guidomarrone9562]

@@spvillano As seen in the documentary "Back to the future"

[@lowercherty]

You hit the nail right on the head. I worked for USS in the 70's and 80's in management. We knew about the Nucors of the world back then, but imports were seen as much more of a problem. In the end, the mini mills ate our lunch. USS could easily have gotten into that business back then but felt they had too much invested in the old mills. Now they are desperately trying to catch up and survive.

[@Mayangone]

In the 90s, I had a chance to visit a re-milling plant in Ohio and also a POSCO plant in South Korea. At the the POSCO steel, producing 30+ times of coiled steel than the amount of the plant in Ohio, I saw less then 10 operators in the fully automatic plant. The plant in Ohio had over 150 employees per shift. Labor cost in the Ohio plant would make it un-competitable.

[@honkhonk8009]

Unions are a bandaid solution. Instead we should have companies beg people to join them, instead of the other way around. Unions also should be forced to compete with other unions, so a Union cant just destroy a company by dragging it down and keeping it behind competitors.

[@chrisfletcher86]

The other thing not mentioned is demand, demand is higher in Asia because they're building more cars, skyscrapers, railways, boats. Even with all else equal you couldn't ship steel from the mid west to south east Asia and beat them on price.

[@FrankDyke]

On that same theme, state and federal spending on infrastructure (as a percent of budget) also plummeted about the same time. Yes, sheet metal was the most profitable, but it was that rebar and structural steel sold by the gigaton to build bridges, skyscrapers, parking garages, and the rest that kept the lights on for the big players in the US. Since our tax dollars are now being sopped up by paying for people who aren't working, we're not investing in our nation's future in the same way that growing nations in Asia are.

[@kimwit1307]

@@FrankDyke "Since our tax dollars are now being sopped up by paying for people who aren't working" Or is that money now flowing into the pockets of big corporations and their billionaire owners thanks to the tax-cuts for the rich and big business? The US is doing a lot of socialism for the rich these days...

[@nunyabidness3075]

Yeah, they can ship here, but we can’t ship there. See the Jones Act for why. There’s lots of reasons for most big failures, but we humans are always going to blame the things that fit our biases.

[@paxtoncargill4661]

​@@FrankDyke Too many people fail to realize the burden social security and Medicaid/Medicare are to society. Their budget is twice that of the military and one hundred times that of NASA. People say that those programs are important, and I'd agree, but they're too expensive for them to be worth it. It's like spending the entire Iraq war every year and a half.

[@eitkoml]

There would be a lot more demand for steel in the US if it was a country that put proper priority on replacing old infrastructure and keeping it up to date. An example is that when the steel beams that hold up a bridge have holes rusted through them, replacing the bridge is long overdue.

[@joes7166]

Well done and researched. My dad was in the steel industry his whole life designing and supplying capital equipment to ,mostly, steel mills. I remember in the 60's him saying that the US steel industry was going down the tubes because they were just resting on there profits and not inventing in BOF and electric furnaces etc. I spent several decades in manufacturing and one company I worked for was mostly mfg and selling parts to the DoD for armored vehicle parts. As Purchasing Manager I had to attempt to find US produced raw materials. By the 80's there were several grades and shapes of steel that simple were no longer produced in the US. A real pain to get a waiver.

[@kevf101]

The establishment steel companies laughing at the up and coming newcomers for their relatively small investment in new technology reminds me of how the legacy car makers did the same thing to Tesla when they first began their investment in electric vehicles. They aren't laughing any more as they are heading towards bankruptcy. Shows how no one learns from history - especially big corporations.

[@nunyabidness3075]

Used to know a woman whose husband was a VP at Bethlehem Steel. She would mention as often as possible, and you could tell she thought this made her the next best thing to royalty. This was in the 1980’s when everyone knew they really weren’t that big of a deal anymore. Once a job at a company is a status symbol, it’s usually on the way down.

[@nathancourtney94]

I can’t be sure but this sounds like some sage wisdom. I’ll remember this.

[@jmlinden7]

@@nathancourtney94 A job is supposed to be an equal exchange of labor for money. If a particular job is super coveted, then that's a sign that the exchange is not actually equal - that people are getting paid more than their labor is actually worth.

[@brunsy1990]

*glances over at Boeing* Hey, wasn't a Boeing job a huge deal in the 90's/00's?

[@alwaystinkering7710]

Google, Facebook, Twitter(a few years ago), Disney, and the whole movie industry. Having jobs doing anything there were high status. That's changed a lot in the last few years and it's a sign they aren't what they used to be. This makes me wonder if they are all in the same place the steel industry was in the 80s.

[@elialmodovar6685]

There is something really, really important missing in your circular logic.

[@victortaveira8271]

Even Nucor is relying on protectionism to thrive. Its process are behind competitors and US isn't investing on Hydrogen furness, so we're creating the new US Steel too

[@brunsy1990]

o.0 knowing the issues with hydrogen embrittlement a hydrogen furnace sounds... wrong.

[@Croz89]

@@brunsy1990 It's for reducing the iron oxide ore into elemental iron. As long as you use the right amount all the hydrogen is consumed in the reaction, combining with the oxygen to form dry steam as an exhaust gas. The resulting elemental iron then goes into the EAF along with other feedstocks for steelmaking.

[@victortaveira8271]

@ Hydrogen acts as a reduction agent in DIR furnace. As consequence, better steel quality produced, greener product and new possible alloys

[@somaday2595]

Nucor - DRI for the last 15 yrs, Midrex process, Trinidad. - CDRI started 2024, Tenova Energiron H2 process, Louisianna. 7.900 tpd - Also buying DRI from Brazil.

[@Clone003]

Hydrogen is also used to reduce the amount of coke needed.

[@Mezog001]

I’m a metallurgist in the steel industry and all of this information is correct. I would love to be a source for another video.

[@jean-pierrevandermerwe7604]

Ive always wanted to know how they get carbon into steel at these quantities? Do they just chuck carbon into the molten metal? Because in my mind that would surely just burn off and form CO2…How does it work?

[@polymorphus1]

@@jean-pierrevandermerwe7604 The basic problem throughout the Iron age has been getting the carbon OUT (as I understand it).

[@jean-pierrevandermerwe7604]

@@polymorphus1 nah bro the difference between Iron and steel is about 2% carbon, the guy who patented the modern way to make steel (by adding carbon) was Rockefeller. The Jewish industrialist. I think what you are referring to is sulphur (which deteriorates steel quality)

[@Kannot2023]

​@@jean-pierrevandermerwe7604your information is simply wrong, you make steel by removing carbon from molten iron. Bessemer was the first to produce cheap steel by injecting air into molten iron. The air burned the carbon. And Rockefeller was a american christian with dutch heritage.

[@jarrodangove1921]

⁠​⁠@@jean-pierrevandermerwe7604 Sulphur does have some nasty effects, but that’s not what’s going on here. I do some research with pipeline steels for my thesis, and I can assure you that carbon levels are almost always less than 0.1wt% in the final product - you pretty much always need to take the carbon out if you’re starting from iron ore

[@boilerchan]

Great presentation . I like . I had a boiler making company. We import boiler plates and boiler tubes. Being a very small company we source from Japan. Our order quantity is small. Japanese steel mills respond to our small quantity enquiry.

[@ronaldanderson6481]

The issue of iron ore is not addressed here. the ore coming out of Australia is far richer than here, providing an advantage to the steel companies that are using this source.

[@jamesgeorge4874]

USS got it's ore from Hibbing, Minnesota, in it's heyday. Modern foundries use scrap steel and iron, then sample from furnaces, and add whatever is needed. Part of the reason steel and manufacturing was big in the Great Lakes region, copper and iron ore was mined in MN, and MI, USS was in Indiana / Chicago, and auto manufacturing, among others in Michigan, Wisconsin, Indiana, all with a giant waterway between them all. Ohio also was a big industrial player. Hence, the "rust belt"

[@Ushio01]

Doesn't matter for the US as most new steel production if from recycled steel not ore. The US right before and after WW2 had massive infrastructure building which necessitated new steel production. But today it's mostly maintaining old infrustructure with some limited building of new infrastructure so the amount of new steel needed is lower. Japan and Europe had there new infrastructure start in the 1950's and China in the 1990's so of course they overtook the US which was ahead. The shear scale of infrasructure the US built from the 1920's to the 1960's isn't really comprehendable today since it's always just been there for most of us.

[@pierregravel-primeau702]

Not really. Look at what is produce in Labrador and is shipped in Europe.

[@lsdzheeusi]

The algorithm led me here with the thumbnail, stayed for the brilliant writing, flawless delivery, and a bit of well done dry humor and snark. Part of me thinks she just covered this topic to show off her bougie Stanley Cup /s subbed! (with notifications on!)

[@TheKarinTS]

It's a Yeti, not a Stanley! Equally bourgeois though, so you've got me there haha.

[@bobbg9041]

Armco in kansas city fully upgraded its factory became clean used recycled metal had a positive profit Was bought up parted off and dismantled.

[@ntsst3]

Pittsburgher here. We're glad they got bought. Both my uncles worked in the mills and agree. New investment has been desperately needed for decades.

[@bloqk16]

One of many aspects that may have contributed to the rise of steel manufacturing in Europe and Japan in the 20th century could have been from the massive urban renewal taking place in those regions after being decimated from World War II. Japan and Germany, in rebuilding their countries after the war, could build new steel mills with the latest and efficient technologies. In addition, there was plenty of scrap steel laying about in Europe from the disabled military vehicles laying about. Whereas in the US, it was still WW II era technology that kept the mills plugging away, as the infrastructure for the industry was not destroyed from wartime aggression.

[@t.s.d.1376]

for the amount of effort you put in, Your video hasnt got the attention it deserves. This IS quality content.

[@sop2510]

Open Hearths are gas-fired and convert molten iron from blast furnaces into steel. No one uses them today because basic oxygen furnaces are better, or melting scrap metal in electric arc furnaces. Coke is used in steel production, not coal!

[@jonathanjones3126]

@sop2510 electric arc furnaces are awesome tech

[@mikeyallen-yk4ol]

But Coke is made from coal a specially grade of coal called metallurgical coal and metallurgical coal is rare coal to get your hands on.

[@greghight954]

@@mikeyallen-yk4olis there a coal coke? I’m familiar with petroleum coke

[@mikeyallen-yk4ol]

@@greghight954 Yes there is coke made from coal in fact the process to make coke from coal is about the same as making charcoal from wood a low as possible oxygen environment is needed to make coke.

[@allangibson8494]

@@mikeyallen-yk4olAny bituminous coal can be used to make coke.

[@CJinsoo]

it isn’t stubbornness. the companies actually played the game right with the union. companies agree to demands to avoid strike. short-term resolved. technology to make steel changes dramatically requiring far, far less workers. long-term, you won’t need the workers-and there is no way around that reality. the companies and unions managed the short-term incentives together. reality eventually caught up with them.

[@jeremiahvandoren7820]

Giving into union demands wasn't playing the game right. Unions saw all the profit and selfishly demanded a large chunk of it. USS should have kept back a larger share of their profits to reinvest in new technology. The unions specifically didn't want USS to adapt new technology because it meant more efficiency and thus fewer employees. USS took the easy way out and it cost them everything.

[@CJinsoo]

@@jeremiahvandoren7820 Both company and union followed the short-term incentives. nothing stubborn or greedy about that. it’s hard to say what would happen if the company retrofitted the plants, or closed them to build new ones. but likely a devastating strike. Everyone who worked in these plants from the 1960# on new how grossly inefficient and unsustainable they were. Take a look at Weirton Steel. They solved the greedy/stubborn management problem by employees taking over the plant. Results? Mass layoffs over time, become more efficient, sell the plant. Gone. Weirton hung on a bit longer but ultimately came to the same end.

[@jacobdinsmore8237]

​@@jeremiahvandoren7820 The workers saw all the money they were making the executives and wanted a better share of what their labor produced? Must be so selfish of them

[@MeloncholyKay]

@@jacobdinsmore8237 Rather, both were selfish. The thing about manufacturing is that you either, A. Have a niche product only you have the information to produce (In turn, not worth it for someone else to do it, rather than just buy your product), or B. Continue to reinvest to stay ahead of the pack. While wanting to be paid well for a job is not a problem, it was that the money was being burned on both ends. They were barely advancing their technology, and the money to build new tech was shrinking. While people have complained about protectionism, you also have to consider the Chinese steel mills are mostly subsidized by their government. That's not to include the fact workers make less than a dollar a day there. You cant compete with things like this in the low to mid-tier. Hence, this is why USS is trying to move into the high end steel market.

[@Pyrichia]

​@@jacobdinsmore8237yeah. And then they pretty much lost everything anyway.

[@greener8116]

The Trans-Alaska Pipeline (1975-77) was built with 800 miles of pipe bought from Japan because US steel manufacturers couldn't produce the required quality and amount of pipe.

[@AQuietNight]

Nucor was a skimming the cream. You still need furnaces to make fresh production steel and lower wage countries do it cheaper. Several countries subsidize their steel makers so few private companies can compete against that.

[@andrewsuryali8540]

You can use EAF to make semi-fresh production steel. Still need scrap for bulking, but current Chinese EAFs can process a mix of 40% iron ore and 60% scrap to make most steel types. Also, some of the Chinese plants are super-integrated to the point that they can run a three-stage process. BOFs process ore, heat capture from the BOF section is then used to generate electricity to power the EAFs and the mills (and rest of plant), and the mill can run independently with only coal, ore, and scrap feed.

[@Smooth_As_Silkk]

The real advantage other countries have is that they either directly fund the upgrading of processes or incentivise them through subsidies and tax breaks. Something that the US has only just got back into doing. Protectionism much like a large monopoly generally leads to stagnation.

[@LordNecron]

@@andrewsuryali8540 Also, if integrated properly, you can use the fresh raw molten iron from a normal furnace, haul it right to the electrofurnace, and fuel that furnace (which had some scrap to heat it up already) with still quite hot steel, so you don't need to smelt it from solid cold again.

[@clessayons]

They use DRI to get their low residual iron.

[@danbode]

I worked for US Steel in the 70s. It was clear they failed to invest in anything - new or old technology.

[@dknowles60]

as a truck driver they were Mean and Nasty to me Nucor was very polite

[@user-px2sn8pr5t]

High cost of labour is not the problem Japanese factories used much better tech to out to do American production

[@JesterHorse]

Thank you algorithm for showing me an excellent creator with an excellent video.

[@-_-----]

Shoulda biked to a scheduled tour 😉 Nearly everyone in Seattle drives by the Nucor plant over the West Seattle Bridge, oblivious that there's a gigantic steel mill in the middle of a single-family residential neighborhood. I've taken the tour here ~5 times, and it's worth it every time!

[@walterrwrush]

Car industry made the same mistakes, letting others get a foothold thinking they will never get the main market

[@RexusOutfitters]

Car industry has also struggled with the burden of union labor dragging down their competitiveness.

[@davidjgill4902]

Also, steel executives were focused on their companies' quarterly stock valuations, not the companies' long-term success and survival. Wall Street has the same focus and demands quarterly performance targets. Decision makers in a public company are always senior executives close to retirement, so stock value at the time of their retirement is their holy grail. For the same reason, they were inclined to say yes to outrageous demands from labor unions. Better that than a debilitating strike. And the demands truly became outrageous in the extreme. When I was a kid in the 60s and 70s, a family friend worked for Jones & Laughlin Steel in Cleveland. I think he got something like 9 weeks of vacation each year. And that was just the tip of the iceberg of endless perks he got. Frankly, he thought it was madness and he had no love for the union. Labor leaders were just like their company executive counterparts - focused on their short-term self-interest at the expense of everything else.

[@thecrackin-u8p]

They get greedy....they are greedy

[@jacobr5627]

9 weeks of paid vacation is normal outside of the US

[@RM-nk9mu]

@@jacobr5627 not 9 weeks. 4 weeks are normal

[@drecksaukerl]

In 1982 I was about to get my engineering degree and interviewed for a technical with J&L. My dad the steel trader essentially said don't you dare work for them. They've got one foot in the grave and you'll be an unemployed young engineer. He was right, of course. I don't remember when they went bunco, but it wasn't long afterwards.

[@Tuning3434]

@@jacobr5627 Inside the European Union it is mandatory to be atleast 20 days paid vacation days per year (at a 40 hr/wk job/ else to ratio). Highest I have ever encountered was 27 holidays + 13 ADV days under what would be considered a very generous contract, although it was common to have part of those days paid out because deadlines didn't move because of holidays. 30 holidays would not be that uncommon though, although a few of those days will be company fixed.

[@blight1885]

0:37 heh... Iron-ic

[@pcatful]

Took me a while.

[@MykePagan]

Cool! In 1986 I was in college and took an intro to Metallurgy class. The highlight of the class was touring the Bethlehem Steel plant, where we got to see their BOFs in operation. Amazing! Sadly, that plant closed a decade or so later and Beth Steel itself folded not long after that. Fast forward to now, and when I go to alumni events I feel that the town of Bethlehem PA is more prosperous now than it was when the plant was operational in the mid-1980s

[@guardrailbiter]

If only Lackawanna, NY could say the same. That city's fate was tied to Bethlehem Steel.

[@bernarddouthit4647]

Great job! I love how you rode your bike to the steel mill to check it out. Seriously - this was both very fun and educational at the same time.

[@terrymoorecnc2500]

General MacArthur rebuilt the Japanese steel industry in the 50's after the war. By that time the US Steel industry was still using decades old tech and stuck with it. This is an old story. The entire US machine tool industry was wrecked in a similar manner.

[@SubvertTheState]

@1:55 No that ladder is not steel, its aluminum. I used to work at Pennex aluminum company in Greenville, PA. Next door to us was Werner Ladder Company, they bought our aluminum billets, definitely saved on shipping and shipping of scrap material. We would load up carts of billets and put them on a small track, that track would go through the plant wall and into the Werner plant to be turned into ladders.

[@1pcfred]

I'm pretty sure that's a fiberglass ladder. The orange colored ones always are.

[@clessayons]

​@@1pcfredthe rungs and rivet's are made from Al.

[@1pcfred]

@@clessayons yeah I've seen fiberglass ladders but I've never owned one. They're heavy. I have wooden A frames and some aluminum extension ladders.

[@inyobill]

The trickle-down economic model is exactly why people hung onto unions as long as they could.

[@northerncaptain855]

Further to your observation to US Steel’s Vertical Integration. In the early 70’s when I was a young Ships Officer working on the Great Lakes, USS owned roughly 100 mostly old and comparatively small Ships (Bulkers )operating on the Lakes.

[@zachdayton4199]

My dads family has lived in Pittsburgh since they immigrated in the late 1880’s. My great grandfather worked in the Bessemer mills his whole life, his son in law (my grandpa) worked in the coke mills when he first graduated from Pitt, my dads first job out of college was repairing and optimizing arc furnace diodes for Union Carbide. They would all agree that Unions only exist because the government fails to do its job. I don’t think Unions are bad, since they have to exist. If we lived in a U.S. that actually reputably controlled wages and worker benefits unions wouldn’t need to exist though. People pay all kinds of money in union dues and fees, often times with the unions spending part of that money on questionable causes. Seems like things would be much more effective and cost efficient if the government could just moderate those things, whether it be the state government or federal.

[@WTHenry2023]

The problem is that gov is just as corrupt if not more corrupt. Look at Social Security. It has all been spent and is now a pay as you go system.

[@johnblakely6568]

I can probably get you in contact with someone at Nucor to try to arrange a site visit. Also, there are three DOE funded pilot projects that were announced earlier this year that aim to decrease the cost of feedstock production.

[@peterg7814]

One of the best videos Ive seen in a while. I loved how you used your own home to just hammer how much steel there is all around us that we take for granted.

[@rudolfbronkhorst1782]

80 percent of the world's primary steel is produced via the blast furnace/ bof route. The inflexibility to adapt to improvements in technology was a management/ union disconnect

[@jeremiahvandoren7820]

The unions knew the improved technology would mean fewer jobs, so they fought it. You see the same approach with the longshoremen on the ports. US ports are third world levels of efficiency, yet they went on strike to prevent automation.

[@carlosdgutierrez6570]

More like 70%, and while BF-BOF still is the dominant steelmaking path, DRI-EAF is constantly increasing and will overtake in raw tonnage the BF-BOF production in the next two decades in the same way BF-BOF left the open heart furnace obsolete.

[@Kirillissimus]

​@@carlosdgutierrez6570 Electric arc furnaces will not replace oxygen converters anytime soon, at least not in Russia. New technologies allow for up to 50% of scrap metal in the converter mix, the basic quality with minimal additives and flux is better and while electricity is expensive processed coal is still quite cheap and plentiful. The only case where going electic is justified is small to medium batches of special types of steel used for special purposes so the price not quite as important. Everything else is done best in huge furnaces, on a massive scale and in a centralized vertically integrated manner.

[@danaschoen432]

In his book, A Passion For Excellence, (1989 ish), Tom Peters talks about "old Steel" and Nucor, and says much of this same stuff.

[@Rainy_Day12234]

Nucor went broke due to the higher costs of implementing the higher quality standards.

[@jamesmooney8933]

I have the 100-year theory. Companies have a life span of 100 years. The Pennsylvania R.R. was at one time the largest company in America. It started in 1854 and died around 1966. Studebaker started around 1854, and died in 1963. I worked in the purchasing dept. of U.S.Steel in the early 70s. It was 70 years old, and started its decline process. One of the interesting things about the office was an operating ticktape machine. It was in a little open closet in the hallway. No one ever paid attention to it. There were many more oddities, but the most relevant was the employee phone book. Odd name that weren't typical to Pittsburgh were over represented. Then there were the braggards, who made it clear that their grandfather work with Carnegie. Of course, their function was not known. They specialized in long lunch ours. It is my opinion that nepotism rots large companies and destroys them.

[@williammoreno2378]

I concur that nepotism rots a company. When things get tight for various reasons, it's the relatives that get protected, it seems. I worked in a shipyard, which we joked had a FBI program, Father. Brother. In-Law When a plant closes and I hear the generations of famies that worked whose jobs are gone, I get disgusted. Never mind the workforce that has no family or relation working in that plant. What about them?

[@dknowles60]

the Prr could have lasted a lot longer if It had Made big changes in 1946

[@jamesmooney8933]

@dknowles60 Corrupt did PRR in

[@casnimot]

The process you describe appears to be happening to Boeing, except rather a bit faster.

[@453tye65e65e65e65]

Same thing happened to Sears

[@drecksaukerl]

Happens every time bean counters start calling the shots and dictating product development. The company will almost certainly go down the crapper.

[@joefrisco]

You are a journalist and can film anything you can see from the public right-of-way. No one can run you off.

[@keithlewis9106]

I work mini mill , million ton mill with very few people. I seen what mill can out put. We made sheet metal coils .

[@ahmaddotpk]

This is such a beautiful video. Informative, interactive and lively. This is why KZbin is still the best platform on internet. It's the best way to share human knowledge across the world.

[@wdmm94]

Electric arc are great, but if they are only living off scrap who is making new steel from ore?

[@mrbillybob444]

China and Japan using Australian ore.

[@wdmm94]

@mrbillybob444 Anyone in US?

[@carlosdgutierrez6570]

​@@wdmm94 you can use direct reduction iron or sponge iron, directly in the electric arc furnace. Sponge iron is mostly produced using the Midrex or HYL processes, reducing iron ore into sponge iron with cracked natural gas (CO and H2), with such composition control that you don't need the BOF converter and at lower temps and thus energy costs than a blast furnace. That is why in my country we only have 5 blast furnaces left countrywide but dozens upon dozens of HYL (and some Midrex) converters directly attached to electric arc furnaces, as close as physically possible.

[@deauthorsadeptus6920]

No, you just collect more old scrap. There is plentiful of metal just laying around.

[@flamingfrancis]

@@deauthorsadeptus6920 Perhaps so but there has to be a balance until direct reduction is economically perfected.

[@MitchFlint]

Who would know better how to organize modern steel production than experts from Japan? If the Japanese acquisition means jobs for the Rust Belt & a contribution to the revitalization of American industry, bring it on!

[@honkhonk8009]

Also to whip the unions into shape and have a dose of reality.

[@richjageman3976]

I worked in an iron foundry in the late 1990s (Yes I know I am old) and we had equipment from WW2. The union officer said that after WW2 the government mandated the new core making equipment be sent to Japan to help rebuild Japan and the melting furnaces were from 1969 and regulations prevented us from modernizing it.

[@kerriwilson7732]

We are from the government, and we are here to help! 🇨🇦

[@bradwilson6601]

Let me guess, management stopped being steelmakers and started to be Ivy league "businessmen".

[@nomad640]

Management is an easy scapegoat that people, like you, like to point. But the problem isn't them, its the union. The union stall and hinder the company effort to modernize their tech, the union fear the new efficient tech would lead to less manpower required and half of them would be laid off. They fought tooth and nail against the company and the management relent. Now they paid the price of their short-sightedness of wanting to keep everyone employed, and now most of them lose their job

[@dknowles60]

@@nomad640 yeah

[@flamingfrancis]

@@nomad640 Sounds very much USA management style...inflexible..we need to look no further than the management to unions blend in nations like the Scandinavians where REAL and honest liaison / communication has resulted in efficiency and quality.

[@adamsmith6995]

Echoing what several oathers have said. I am so glad the algorithm pointed me to this site. You are doing a great job of finding the balance of providing data to support your summary of a complicated issue. I love your use of graphs.

[@DougWedel-wj2jl]

Your video is a great supplement to Clay Christensen’s books. The chart showing how different processes competed with each other was very helpful. Thanks!

[@alileevil]

The USA isn’t in a position to compete in manufacturing because of high wages. Steel workers in India and China get the equivalent of USD 2400 a year and I think I overestimated it. It’s sometimes half of this amount.

[@brucenorman8904]

The Government exacerbates the issue by selling T-bills. If you are a foreign nation and want to be more competitive on international markets with the U.S.A., you buy T-bills to keep the Dollar elevated in value vis-a-vis your own currency. This is one of the reasons why China has purchased many T-bills.

[@mennovanlavieren3885]

High wages shouldn't be a problem. Here in The Netherlands we are at the top of the game when it comes to agricultural produce. Technology and innovation offsets the high wages and shortage of land.

[@Vin.1904]

The second biggest steel company on the chart is from europe. High wages isnt the main problem

[@alileevil]

@@Vin.1904 LOL it is owned by an Indian steel company which generates most of its profits.

[@Vin.1904]

@@alileevil just a stakeholder or literally own the company?

[@T.K.P.]

Thanks Karin Shedd ❤

[@harrisburghawk315]

Junior high report. Nucor does not have blast furnaces therefore they cannot make all grades of steel. No mention on how us built bof shops for Japan after the war.

[@holgernarrog962]

Scrap is used in the electric arc furnaces. The quantity of scrap is limited. As long as the USA imports plenty of steel products a steel industry based on scrap is feasible but not in a growing industry. From my point of view the USA could outcompete most countries of the world in steel making as well with blast furnaces... Advantages of the USA.... - Thanks to Donald there is no climate fraud with expensive carbon pricing in the USA -Domestic coking coal is less expensive than the imported as Japan, Korea, Europe and partially China use. - Energy as electricity can be produced by inexpensive coal or gas. - Canadian iron ore is less expensive than the imported iron ore of Japan, Korea and partly China. Disadvantages - A lot of expensive regulation. - Aggressive unions.

[@SweetiePeachies]

Karin you make present this topic is such a fun and interesting way and I'm loving it!!!

[@roc7880]

explaining complex stuff to the masses is a charity act.

[@joeyager8479]

Large legacy companies are notoriously bad at adopting new technologies. By the time they finally realize they need to modernize, it's too late to save the company.

[@honkhonk8009]

I mean if your entire job consists of coming to work, and just sitting down to maintain already existent things, then your naturally become lazy to change. What instead should happen is when it comes to modernization, hire new people entirely to figure it out and treat it like a mini-startup within the company. Give them the resources and expertise they need and threaten to fire them if the venture fails.

[@joeyager8479]

@@honkhonk8009 Management is the problem and they don't fire themselves. Eventually the Board will fire the CEO, but by then it's too late. The reason they don't like innovation is that it may require large new capital investments that will decrease dividends to the stock holders. Since the mid-1900s, most new products have come from small companies that took the chance on new tech and succeeded.

[@GeneD283]

I watched your video with great interest I was a US Steel employee from 1975 to 1987 when I was finally able to land a job outside the steel industry. When I graduated with a MS in engineering I remember how great it felt to join US Steel in their corporate headquarters in Pittsburgh. At that time they were still one of the pillars of US manufacturing might. I could see the writing on the wall around 1981 but I still felt loyal to the company and my fellow employees. I remember talking with my friends in sales they indicated foreign steel was being sold for less than it cost us to make it. Your analysis was right on we had an extremely adversarial / bitter relationship with the union. For years the company granted generous benefits because they could readily pass on the additional costs to the customer that would come back to bite them. You didn't mention the ominous costs of pollution controls in the US but they also put us at a disadvantage compared to other countries. It took me eight months or so to find another job because I wanted out of the steel industry altogether.

[@davidanderson7389]

Nice way to start my day, a cup of coffee in my steel Yeti and some compelling history. Thanks

[@MightyFineMan]

Anyone willing to cycle out to industrial locations for very interesting video topics such as this absolutely has my subscription.

[@Shredxcam22]

Now tell the next part of the story. How former Nucor people started the new big players in town. Steel dynamics. Big river steel (owned by uss now), and coming soon hybar

[@Rambam1776]

I enjoyed that thoroughly. I have just subscribed and look forward to going through your back catalog.

[@jamix203]

Brilliant writing and narration.

[@RobertBeck-pp2ru]

I worked at a cold roll mill for 25 years. The steel coils we rolled came from integrated mills still using B.O.F. tech. Our customers demanded very specific grades of steel precisely alloyed for the final product they were to be used in. The E.A.F process cannot profitably control grades and alloy required in demanding situations. Their furnace runs on a never ending mish mash of junk steel. Its' fine for less demanding products, but I don't think you would be comfortable driving your car knowing the seat belt buckle was stamped from scrap clothes dryer duct. I think there will always be a need for integrated mills, but they will be using greener technology and far fewer workers.

[@jeremiahvandoren7820]

Great comment. EAF can't be for everything, but Nucor is great at what they do.

[@carlosdgutierrez6570]

DRI (HYL, Midrex, etc), can allow for such flexibility with an AOD-VOD/LF to refine the composition, and the sponge iron from DRI is easier to adjust chemicaly than pig iron to begin with.

[@drecksaukerl]

When I worked for NYSDOT, a sales engineer from Nucor paid us a visit to pitch using more structural steel for our bridge projects. He explained that an electric arc furnace recycles old steel and is therefore much more energy efficient than processes that make steel from raw ore. Since you don't know the composition of the scrap being fed into the furnace, the question naturally came up as to how then you can control the chemistry of the final product. His answer was that a flux is added to the melt that precipitates out most of the unknown impurities. When I asked just what this flux actually is, I got a "sorry, secret sauce" answer. Whatever the process, Nucor has a corner on the structural steel market in the US, so they obviously don't have a problem meeting the applicable ASTM standards. Understood that there are allowable chemistry variations in ASTM for different heats, so if a given customer has a stricter requirement, it may be necessary to go to a specialty supplier.

[@flamingfrancis]

Up until 1988 two small Electric Arc furnaces (25T + 50T) the latter coupled with an Argon Oxygen Degasser, produced all of Australia's Stainless Steel. Some of the most complex SS grades were produced with the obvious high alloy content. There was nothing difficult with this production and when SS campaigns finished other difficult to make steels were produced. All steels, incidentally, are produced to a specification set out by the relevant Standards organisations. There is little difference between the global Standards organisations insofar as steels are concerned.

[@flamingfrancis]

@@carlosdgutierrez6570 To clarify this use of the term Pig Iron. It is incorrectly used a lot in the USA. Pig Iron is produced in a Pig Mill when the molten Iron ex the BF is poured into small moulds and solidified. The resulting product is called Pigs due to the shape of the ingot which weighs maybe 10Kg. This process was done during WW2 as a convenient way to store and transport any excess of Iron. So the molten Iron as released at the BF taphole / runner is also referred to a the cast or cast iron. As a young trainee in mid 60's our integrated plant had a Pig Mill which had been in place since WW2. We had a famous Aussie Prime Minister named "Pig Iron" Bob Menzies and I'll leave it there for others to look up why he had that name. With the chemical "adjustment" of hot metal to steel there is no difficulty given the metal is blown to near the Carbon content required. As with EAF production further alloys will be necessary to meet the specification.

[@southothehighway]

This story ignored the lost demand that came from imported cars and appliances..

[@2moosepie]

The corporation never reinvested in there mills like they should have giving them the name slum lords of manufacturing My time in USS was 1974-2014 United steel workers

[@dknowles60]

a a truck driver USS was a very Mean and Nasty Place to un load and pick up a load. Nucor was a lot better place to pick up a load

[@drmodestoesq]

That wire is BX cable. It has plastic insulated copper wires in it surrounded by aluminum sheathing.

[@1pcfred]

Not all BX is aluminum armor. There's definitely steel armored cable.

[@robbikunkle4700]

The conduit is steel, right?

[@drmodestoesq]

@@robbikunkle4700 EMT tube? The solid pieces of thin walled pipe? Yes, that's galvanized steel.

[@drmodestoesq]

@@1pcfred Yes, there is but it's relatively rare. You put that stuff in a parking garage or some other such damp environment and it'll start rusting pretty quickly.

[@1pcfred]

@@drmodestoesq steel BX is galvanized. I've seen the stuff painted. It'll rust. It's really no worse than EMT though. I have some ancient steel jacketed BX cable. Don't worry about the jacketing. The insulation inside of it is shot now.

[@SeaScoutDan]

But upgrading furnaces now will increase my expenses. My stock holders wants that sweet sweet profit margin and dividens. Any decrease is seen as the end of the company, and every ”short term" investor / trader will pull out while they can.

[@jeremiahvandoren7820]

I've never heard investors complain that investing back into the company is a negative. Pretty obvious you're not an executive anywhere.

[@carlosdgutierrez6570]

​@@jeremiahvandoren7820the venture capitals are like that.

[@DesertHomesteader]

Umm...be careful handling that sheet metal! Those tubes are what caused me to leave a trail of blood all over the local Home Depot.

[@JeffAntonucci]

Enjoyable and informative. Your presentation skills are impressive! Your a natural. I hope your channel really grows. I work in the Automotive industry and I've been watching it self destruct due to greed and poor decision making basically all my life.

[@TheMg49]

Most interesting. Thumbs up. Subscribed.

[@Ultimatebubs]

Well done... hope that you get some of that sweet KZbin ad revenue to finish renovating your house!

[@EmmettConrecode]

Repeating CCCP propaganda isn't the truth.

[@TheKarinTS]

Your comment to the algorithm gods’ ears 😅

[@forgotten1s]

She is an employee she doesnt get the revenue she probably has a salary

[@jimmiller5600]

Let's remember the Boomers. They were the trigger for the massive materialism that required steel. They topped out in the early 80s and steel demand slowed to a point that recycling could handle a lot of the demand. Modern steel is recycled 60-80%.

[@honkhonk8009]

Yea nowadays cars are like $30k and nobody can afford the materialism that boomers had.

[@JeffreyGreene-k6i]

As a Rodbuster or Reinforcement Iron Worker it's really NOT Appropriate to Speak about Rebar as Nothing but maybe it wasn't very Profitable because it's paid for by the pound!!! 2,000 pounds per man, per 8 hours everyday or More & up to 5 to 7 Tons per man in a 15 to 17 Hour day!!! 6 Days a Week in 3 Mancamps in the lower 48 States for over 27 Years!!! Your Quite Welcome for you're Electricity, Water, Technology & of course a University to go to School with Air Conditioning & Central heating while We worked from -77 Below Wind chill factor!!!

[@kowalityjesus]

Nice Job Karin!

[@HSkraekelig]

This was a most enjoyable presentation. Thank you.

[@ragnabob]

Nice video, well researched and nicely presented, I've subscribed. Also, when tying your shoes, try making the very first not the other way around (so normally left over right, now do right over left, or vice versa), your total knot will become straight, instead of up-down like it is now.

[@davidyarb5885]

Great piece of video. I remember as a kid in the 70’s all the steel production in Birmingham and Bessemer, Alabama. Then in the 80’s I remember all the talk of Nucor being the salvation of the US Steel industry as US Steel was in decline. There is not much, if any, steel industry around Birmingham anymore.

[@daikucoffee5316]

lol, this is part of the plot in cyberpunk 2077

[@clintonflynn815]

This video is so cute I'd swear NPR had a hand in its production!

[@adamtreen-noaafederal1354]

Having grown up near Pittsburgh, the steel industry collapse was devastating. Some towns are still shells of their former glory. USS and the rest forgot the most important rule: adapt or die.

[@kkrolik2106]

Once UK was Nr steel producer, simple history repeats itself due we not learn from past failures.

[@Rocinantewow]

I worked at US Steel Garyworks in the 90s. At that time USS would strategically buy scrap metal to keep scrap prices high to limit Nucors profitability.

[@iggyboo]

"Hey kids! We're going on a field trip to a steel mill!" "Yyaaaaaay! [Pulls up to steel mill] "Okay kids, there's the steel mill" "Wooaaaa" ... "Okay sit down we're done and heading back" .... [Palpable disappointment]

[@friedfish69]

That tree next to you garage could be trouble. Roots could cause the garage floor to heave. Worth looking into.

[@luketilka2896]

Nucor is building a new sheet mill near me in WV

[@icefire99699]

I think this story would benefit from the descriptions on how and why each process works and is better than the last.

[@Sunset4Semaphores]

Save US Steel!

[@junkdubious]

This why you benchmark every year. You compare your process to that of others. Then you incorporate what works into an R&D strat. Managerial slack however just reinforces the status quo, and you then become the 'old' company. Still happens today.

[@RexusOutfitters]

Glosses over a key point that has caused many companies in various industries to decline: "Non-unionized labor." (12:25) Unions make their bosses rich while slowly making the jobs of their members non-competitive because of the unsustainably high wages and crushing pension benefits. Recent example is the bankruptcy of Yellow Trucking company. Even more recently the boss of the longshoreman's union bragged about how he's gonna bring the country to its knees until we bow to his demands - which specifically include NOT modernizing.

[@mra7282]

Video production was unbearable…like the videos my 7 year old watches on KZbin. Every cut is like “really excited” with loud and high pitch voice…..I suspect this was how the video audio was edited rather than using natural audio. Couldn’t get more than 1/3 way in before I called it quits.

[@hippiehillape]

If you remember Atlanta in the 70s, you remember smog

[@jeremykamel9655]

Labor should never be blamed for management’s failures. Labor doesn’t control the purse strings. So don’t blame them for management’s failure to modernize. If USS had built a new plant the union would have staffed it at whatever manning levels were needed. I looked at what Nucor pays. They pay very well. I say a maintenance man position that paid well over $100k with full benefits. So wages were not the problem. Mismanagement and failure to modernize was the problem.

[@ronniepemberton1942]

Great video.

[@Bigjoedo66]

Very interesting video thank you!!