Steel crisis

The steel crisis was a recession in the global steel market during the 1973–75 recession, following the post–World War II economic expansion and the 1973 oil crisis, and lasted well into the 1980s.

Steel prices dropped significantly as the market became saturated with steel from previous demand, and many steel mills in the Western world were driven out of business. Some areas affected by the steel crisis were the Rust belt in North America, the English Midlands in the United Kingdom, the Ruhr area in West Germany and Bergslagen in Sweden.

United States

The U.S. city of Youngstown, Ohio was among the hardest-hit areas of the steel crisis, with the announced closure of Youngstown Sheet and Tube on September 19, 1977, still known to locals as Black Monday; as of July 2013, Youngstown still has not recovered from the steel crisis.^[1] Other major steel producing cities, such as Chicago, Gary, East Chicago, Cleveland, Toledo, and Pittsburgh, never recovered from the losses in industry and resulting unemployment, depopulation, poverty, and crime.

From 1980 to 1988, U.S. Steel shuttered the 7 least-efficient of its 12 steel mills and slashed its industrial workforce from 75,000 employees to just 20,000, and salaried employees were reduced from 30,000 to just 5,000. By 1989, the American steel industry was able to cut operating costs by 35% and increase labor productivity by 38%. U.S. Steel was able to export steel profitably for the first time in a decade. ^[2]

Britain

In Britain, a series of political and economic crises impacted the steel industry. The steel industry was nationalized in 1967 by the Labour government. Historian Alasdair Blair states that British Steel Corporation (BSC) had "serious problems" including complacency with existing obsolescent plants (plants operating under capacity and thus at low efficiency); outdated technology; price controls that reduced marketing flexibility; soaring coal and oil costs; lack of capital investment funds; and increasing competition on the world market. Blair argues that by the 1970s the government kept employment artificially high in a declining industry. This especially impacted BSC since it was a major employer in a number of depressed regions.^[3] In the 1980s, Conservative Prime Minister Margaret Thatcher re-privatised BSC.

References

Bibliography

• Birch, Alan. Economic History of the British Iron and Steel Industry (Routledge, 2013).
• Blair, Alasdair M. "The British iron and steel industry since 1945." Journal of European Economic History 26#3 (1997): 571+.
• Dudley, G. F., and J. J. Richardson, eds. Politics and Steel in Britain, 1967-1988: The Life and Times of the British Steel Corporation (1990), ISBN 978-1855210721
• Evans, I. M. "Aspects of the Steel Crisis in Europe, with Particular Reference to Belgium and Luxembourg," Geographical Journal Vol. 146, No. 3 (Nov., 1980), pp. 396–407 in JSTOR
• Meny, Yves, and Vincent Wright, eds. The Politics of Steel: Western Europe and the Steel Industry in the Crisis Years (1987) excerpt and text search
• Rhodes, Martin; Wright, Vincent. "The European Steel Unions and the Steel Crisis, 1974-84: A Study in the Demise of Traditional Unionism," British Journal of Political Science, Apr 1988, Vol. 18 Issue 2, pp 171–195 in JSTOR
• Scheuerman, William. The Steel Crisis: The Economics and Politics of a Declining Industry (1986)
• Warrian, Peter. A Profile of the Steel Industry: Global Reinvention for a New Economy (Business Expert Press, 2016).