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Industrial America: The American Steel Industry to the early 1970s

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Introduction

Industrial America: The American Steel Industry to the early 1970s Introduction The steel industry has been profoundly important to the development of USA by its value of output, input to the American manufacturing industries and in terms of the extent of its employment in the past. It's been important because of its political clout of its corporations and finally it's been important for strategic reasons. Background to the American Steel Industry The industry dates from mid 19th century when it grew out of the iron industry. There was huge demand for steel following the end of the Civil War and the building of the great trans-continental railway. The industry centred in Pittsburgh where the classic locational determinants of the steel industry were operative in the late 19th century. Rich deposits of iron-ore, juxtaposed to metallurgical coking coal, limestone as a flux for smelting, plentiful supply of water, plentiful migrant and immigrant labour, proximity to the markets of the American Manufacturing Belt, ease of transport to those markets and finally entrepreneurial ability and capital for e.g. Carnegie. At the end of the 19th century, many of the American manufacturing of steel was produced by small firms of a total output of 10million tons. The US Steel Industry 1900-1940 Output increased significantly during this time period from 10million tons to approximately 70million tons. By the early 1920s, the US produced 3/5 of global output. Production was reduced in the Great Depression before recovering in the later 1930s. ...read more.

Middle

The PPPS was deemed illegal in 1924 and was replaced by a multiple basing point system which continued to emphasise the importance of the traditional steel-making areas. This system ended in 1948. Location: During the first 40years of the 20th century, the steel industry had a very distinctive spatial distribution. The greatest concentration of steel plants lay in the Western half of the Manufacturing Belt. i. Coal-field orientation: e.g. Pittsburgh, Youngstown, Johnstown ii. Intermediate lake-side orientation: e.g. Chicago, Cleveland, Detroit, Buffalo iii. Ore and Coal orientation: Birmingham, Alabama iv. Ore-deposit orientation: Duluth (of much less importance) v. Eastern seaboard location: e.g. Baltimore (and Trenton) The US Steel Industry 1940-1970 This was a period of general prosperity, but also of misplaced complacency in the American steel industry. Output increased to 91million tons by 1970 and would subsequently peak at 111.4million tons in 1973. During the decades of the 1940s, 1950s and 1960s, significant changes occurred in the steel industry in terms of raw material inputs and demand. Raw Materials Iron Ore: Prior to 1940 the US steel industry had relied heavily on indigenous ore supplies. Over the following decades home-produced ores, including high grade haematite form west of Lake Superior with their 60% metal content, were severely depleted. Increasing quantities of ore had to be imported from Latin America, from Labrador in Canada and from Africa. These movements were facilitated by the technological advances and increased size of ore-carriers. ...read more.

Conclusion

Pittsburgh and Pennsylvania: Approximately a third of US steel production remained in this area. The relative importance of Pittsburgh's share of American steel production had been declining since the start of the 20th century although in absolute terms, output increased during the 1960s. Steel production in this area demonstrated classic characteristics of industrial inertia as many of the original favourable locational determinants were no longer operative. Local iron ore supplies were now exhausted, local markets were now restricted and narrow valley floor sites had become congested. Pittsburgh remained significant however as a major locus of administration and of R&D for the steel industry. Areas beyond the Manufacturing Belt: The reminder of American steel production occurred in the south and west of the USA where markets were expanding in the Sunbelt. The increased proportion of steel production in areas other than the north and northeast illustrates something of a locational shift in the industry, but the extent of this should not be exaggerated. In 1969 the US Steel Corporation was the largest steel-producing company in the world and it accounted for a quarter of US steel production. Second and third in terms of output were the Bethlehem Steel Corporation and the Republic Steel Corporation respectively. Conclusion The 50s and 60s were a period of prosperity and large scale production in the US steel industry. However, rationalisation had also been on-going with more than 100 plants closing during these decades. Incipient problems relating to lack of innovation, poor management and import penetration were beginning to emerge and would become particularly serious during the next 2 decades. ...read more.

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