Sale of Youngstown mill seems to be a good thing
Pardon our cautionary tone in commenting on last week's announcement that North Star Steel's tubular steel division is being sold, but the history of the steel industry in the Mahoning Valley shows that a sale of a mill hasn't always worked out for the best.
That said, we are encouraged by the fact that Lone Star Technologies of Texas is paying $430 million to Cargill, Inc., North Star's parent, for the pipe mill on Martin Luther King Boulevard in Youngstown and a tube processing plant in Houston. And we are encouraged by the assurances from Lone Star that there won't be any changes in the management or work force as a result of its purchase.
In praising the Youngstown and Houston operations, Rhys J. Best, chairman and chief executive officer of the Dallas-based company, made note of their "distinguished track record of operational excellence and strong financial performance."
That should be music to every Valley resident's ears because it once again shows that the caliber of our manufacturing work force is second to none.
Success story: North Star's Youngstown mill, which Cargill bought from Hunt Energy Co. in 1985 for $22.5 million, has been one of the success stories of the city of Youngstown's economic development strategy. The state and local governments put together an incentive package, including tax abatements, that gave the company room to maneuver as it found a niche in the highly competitive steel industry.
Over the years, as the demand grew for its seamless pipe, used mainly for drilling deep underwater oil and natural gas wells, Cargill pumped in millions of dollars to ensure the mill's viability. A $30 million expansion and modernization project was completed last year. The tax abatement the company received from the city of Youngstown has expired, which means the Youngstown School District is receiving hundreds of thousands of dollars each year.
Given the importance of North Star Steel to the region's economy, it would be worthwhile for local and state officials to assure Lone Star that it has a partner in Youngstown and Columbus. The Texas company should know that any expansion plans it might have for its seamless pipe mill would result in the Ohio Department of Development and the city of Youngstown joining forces to offer whatever assistance the company may need.
Gov. Bob Taft, who is well aware of the challenges facing the Mahoning Valley in its job-creation effort, has made it clear that the state would work closely with local communities to not only attract new companies, but to assist existing ones expand.
Lone Star need only look at the state's role in the Valley's effort to persuade General Motors Corp. to build its new line of compact cars at the Lordstown assembly complex to know that it made the right decision buying a plant in Ohio.