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Article Excerpt
The United States will be competing with China for the next 30 years in a global economic battle that will change the face of steel production and consumption.
Mirroring the industrialization of America a century ago, China has launched a giant effort to upgrade its economy. "China now has the cash flow to build up its infrastructure. Third World countries building infrastructure are massive consumers of steel. What was true in this country 100 years ago is true in China today," said Glenn Kidd, manager of market research at U.S. Steel Corp., Pittsburgh.
Presenting his industry and economic outlook to the TPC members, Kidd noted that the shifting of part production to Chinas growing industrial sector--while a threat to American jobs--is a natural evolution with historical precedence.
"Part of the death of American manufacturing is the process of slowly peeling off the layers that can be performed somewhere else" he said, such as production of labor-intensive wiring harnesses in the maquiladoras of Mexico rather than in Detroit. (A maquiladora is a foreign-owned factory in Mexico, where parts are assembled by lower-paid workers into products for export.)
The American empire is one of many empires that preceded it, Kidd added, and may be in a very different position in the next cycle. "We are just witnesses to history."
John Nolan, vice president of marketing for Steel Dynamics Inc., Butler, Ind., whose presentation focused on the adverse effects of an overvalued dollar on American manufacturing, said that more than one in every 10 U.S. factory jobs has disappeared in the last few years--from industries as diverse as machinery and textiles to lumber and chemicals. "The damage is as broad as it is deep"
Nolan pointed to an e-mail he received recently, which read: "By this fall, all GM and Ford cars will have Chinese-made wiring harnesses, universal joints and bearings. `Made in America' for the Big Three will be a bad joke unless the dollar collapses and China fixes its currency."
Many economists believed it would be OK for low-skilled American jobs to move offshore. "In their considered opinion, what America really...
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