The
Stel Salaried Pensioners Organization wishes to thank The Hamilton Spectator
for permission to post the following article by Naomi Powell, published in the
August 27, 2007 edition
U.S. Steel an American industrial colossus
The Hamilton Spectator
(Aug 27, 2007)
The company buying Stelco is an American
industrial giant that counts Andrew Carnegie and J.P. Morgan among its founding
fathers.
Based in Pittsburgh, U.S. Steel is the
largest integrated steelmaker headquartered in the United States.
Since 2004, the $10-billion firm has been
led by John P. Surma, a Pennsylvania native whose pastimes include golf and
hockey.
U.S. Steel is an industry giant, capable of
producing 26.8 million tons of steel each year at plants in Pennsylvania,
Indiana, Detroit, Illinois and
Alabama. It also has foreign operations in
Slovakia and Serbia.
U.S Steel has been on the prowl for assets
lately. It recently paid $2.1 billion for Lone Star Technologies, a
Dallas-based provider of oil field pipe products.
U.S. Steel has eyed Stelco in the past,
taking a hard look at the steelmaker while it was still in bankruptcy
protection in 2004.
Since then, consolidation has ripped through
the steel sector, with Canada's Dofasco, Ipsco and Algoma Steel all snapped up
by foreign players. Global steelmakers have been buying up smaller rivals in
order to expand their global footprint and gain more power at the bargaining
table with customers and raw materials suppliers.
The rush of takeovers has limited the number
of independent steelmakers available to major players looking to expand or
establish operations in North America.
Stelco and AK Steel, of Middletown, Ohio,
are among the last items on the shelf.
The granddaddy of established steelmakers,
U.S. Steel was founded in 1901 when J.P. Morgan and Elbert H. Gary combined
Andrew Carnegie's steel company with their holdings in the Gary's Federal Steel
Company, and several smaller companies. With a capitalization of $1.4 billion,
it was the largest business enterprise ever launched at the time. In its first
year of operation, U.S. Steel controlled 67 per cent of the domestic market,
according to the company's website.
In recent years, U.S. Steel has come under
pressure from upstart steel mini-mill operations -- steelmakers that use
electric furnaces to melt scrap steel rather than make it from scratch. The
mini-mills have presented fierce competition, particularly in the steel bar and
beam markets.
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