U.S. steel mills have had a long-standing reputation of being unionized, grim manufacturing plants polluting the skyline of the blight-filled Rust Belt. Lowndes County’s Severstal does not seem to fit the stereotypical steel mill mold, however.
With a workforce of almost 700 employees and hundreds of contract workers, the vibe among its executives and employees is anything but morose. But the increasing rise of cheaply made imported steel does have some employees concerned.
During a Thursday guided tour of the facility, U.S. Rep. Alan Nunnelee (R-Tupelo) heard firsthand the concerns of some of the employees at Severstal.
“I’m here to talk to you to see what we can do in Washington to help keep these jobs in Mississippi,” said Nunnelee.
According to data from the U.S. Department of Commerce, $225.3 billion in steel was imported in July and $183.3 billion was exported, creating a steel trade deficit of $42 billion. August and September figures will be released Oct. 11.
William D. Wednieski, Severstal’s director of corporate taxation and government programs, said the biggest concern with imported steel is with China and other countries tries that do not regulate environmental quality and protection.
“China would argue that in the 1800s, the U.S. was unregulated,” Wednieski said. “China feels this is its industrial age. China doesn’t have an Environmental Protection Agency and they do not regulate emissions. Most of the steel mills in China are state-owned enterprises. This means that the Chinese government owns the steel mills. They are making cheap, unregulated steel and dumping it in the U.S. The Department of Commerce is charging import tariffs to an American buyer of Chinese steel. The U.S. government is essentially trying to penalize the American buyers of cheap foreign steel to put them in the same position they would have been had they bought the steel from an American mill like Severstal Columbus (or its competitors like Nucor, US Steel, or ArcelorMittal).”
According to a report prepared Sept. 25 by Thomas J. Gibson and Kevin M. Dempsey for the American Iron and Steel Institute, steel imported from China has increased almost 30 percent since 2011. As the U.S. and global economies continue to slow, the risk factors for imported steel will increase. Risk factors include an over-capacity of steel, with China alone having more the 200 million metric tons. The report claims China’s demand for steel is slowing but Chinese steel production in 2012 is on pace to set a record and prices for steel are declining. The Chinese government is also looking at tax rebates for the exports of steel.
“They are not playing on a level playing field,” Nunnelee said. “We want to protect our jobs and our environment. We want people to not buy steel from a country that is polluting our environment.”
Wednieski said the steel made at Severstal, which is made from recycled scrap metal, is used in appliances, sheet metal, construction beams and other daily-used products.
“Steel consumption in the U.S. is the highest in the world,” said Wednieski. “When I say consumption, I’m talking about the food cans you buy, vehicles, lawnmowers — things you don’t think about.”
Severstal creates about 2-to-2.2 million tons of steel a year. “We have the capacity to make a lot more if the economy was better,” Wednieski said.
The stagnant economy is another area of concern for employees of the Columbus Severstal plant. Wednieski said the average starting salary for a worker at Severstal is approximately $50,000 a year.
“This is a very incentive-driven operation,” Wednieski said. “It is a non-union plant and the people in Columbus make more than at other steel mills across the country. The (Golden Triangle Industrial Park) is one of the best industrial sites in the U.S. There is a lot of uncertainty surrounding the election. There hasn’t been many capital investments in other parts of the country like there has been here (in Lowndes County).
“The workforce here also has a lot to do with it. When you launch a new mill, you bring in people from other steel plants. But we didn’t do a lot of that. We wanted to hire from the area. We wanted an untainted workforce that had a down-home work ethic.”
Severstal is a second career for many of its employees, some of whom came from the Nissan Plant in Canton, were laid off when the Sara Lee Plant closed in West Point and some are even former farmers and school teachers. Regardless of their employment backgrounds, the Severstal employees who engaged Nunnelee in conversation all had one common goal — to hold on to their jobs.
“We want an opportunity to make a good living and have health care and take care of our families,” said former teacher Taylor Purtell, who is the current supervisor of galvanized tubing. “We want to know what’s next for the area — what is the next step?”
Nunnelee said he hopes private investors will continue to invest in American jobs.
“The government does not create jobs but it can create an environment where people are willing to invest and create businesses,” Nunnelee said. “The most important thing in America is jobs. There’s a cloud of uncertainty hanging over our economy. People are reluctant to spend their money. The thing Mississippi brings to the table is its job market. It’s part of our culture to be at work on time. Severstal understands this.”
“This is about more than our 700 employees,” Severstal Human Resources Manager Ray Hamer said. “It’s about thousands and thousands of people. It would be horrible if something ever happened to Severstal.”
Jeff Clark was previously a reporter for The Dispatch.
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