Imports, Technology, and the Success of the American Steel Industry

America’s concern over the international competitiveness of its traditional industries has recently focused on the fate of the American steel industry. Rising steel import levels, falling domestic prices, and a record number of mills declaring bankruptcy seemed to represent yet another case of declining American market power. The Bush administration implemented trade protection and urged the industry to consolidate in order to better face foreign competition. To a large extent, however, these protectionist measures may be unwarranted. The current American steel industry, in fact, represents a story of technological achievement and competitive success far more than a story of manufacturing capacity lost to cheap foreign imports. Advanced technology has been a major factor in the restructuring and competitiveness of the American steel industry, leading to changes in the workforce, raw material requirements, capital equipment, production scale, and geographic location of steel mills. This technology has been implemented in a host of new thin-slab mini-mills, which have proven capable of producing premium steel products in direct competition with the best of the traditional steel mills. This paper attempts to disentangle and assess the impact of both foreign and domestic competition on the flat-rolled steel industry by empirically testing a model that evaluates sources of injury to industry competitiveness. The analysis finds that, while rising import levels may have aggravated the decline of traditional steel production, domestic competition, represented by advanced mini-mill production methods, have had a more fundamental and long-term effect on the structure and competitiveness of the American steel industry

Imports and New Technology: Sources of Injury in the Traditional Steel Industry

This paper explores whether imports or new technology has played a greater role in the recent restructuring of the American steel industry. A modified version of an injury index model developed by Pindyck and Rotemberg (1987) is used to analyze the comparative impact of steel imports and thin-slab minimills on capacity utilization rates in the flat-rolled steel industry. The analysis finds that, while rising import levels may have aggravated the decline of traditional steel production, the emergence of minimill production methods are a more fundamental cause of declining capacity utilization rates in the traditional steel sector

Intermediate steel-industry suppliers in the Pittsburgh region: A cluster-cased analysis of regional economic resilience

The experience of intermediate steel-industry suppliers in the Pittsburgh region offers valuable insight into how traditional industrial clusters can serve as a source of economic resilience in regions like Pittsburgh, where a "signature" industry contracts or relocates. The authors find that intermediate steel-industry suppliers in Pittsburgh remain an important part of the region's economic base, serving as a significant source of export income from national and international markets. Survey results offer a description of the cluster's characteristics. An important subset of firms in this cluster relies on key contacts in the region such as suppliers, partners, and business networks for collaboration on product development or marketing. By recognizing and supporting local linkages of these kinds, policy initiatives can help to strengthen such clusters and contribute to a region's economic resilience. © 2008 Sage Publications