Screaming that they are "too big to fail," United States steel companies have gotten in line with their hands out hoping some of the goodies are tossed their way:
The steel industry, having entered the recession in 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.
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.
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. “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.”
"Buy America" is all fine and dandy but begging government to initiate projects just so the mills can operate at full capacity? Just how bad is it for the steel industry?
Through August, steel production was actually up slightly for the year. The decline came slowly at first, and then with a rush in November and December. By late December, output was down to 1.02 million tons a week from 2.1 million tons on Aug. 30, the American Iron and Steel Institute reported. The price of a ton of steel is also down by half since late summer.
“We are making our steel at four mills instead of six,” said John Armstrong, a spokesman for the United States Steel Corporation, adding that two mills were recently idled and the four still operating are running at less than full capacity.
“The third quarter was one of the best in U.S. Steel’s history,” Mr. Armstrong added. “And it has been a very precipitous drop from there.”
So, while the rest of the economy was tanking, the steel industry was doing very well - until a few weeks ago. And now, based on a couple of bad weekly reports, we are to spend Obama's trillion dollars just because their profits are going to go down after record earnings earlier?
Pardon me if my give a damn is busted but this may be the weakest case of all the corporate beggars out there. They at least should have the decency to be actually close to going bankrupt before reaching into our pockets. But I suppose with all that free money flying around, no one can resist getting something for nothing.