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What brought on steel industry's demise? Signs of trouble were there

By William K. Alcorn

Sunday, September 17, 2017

By William K. Alcorn

alcorn@vindy.com

YOUNGSTOWN

Steel industry in the Valley

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Video Set

Gerald Dickey on Black Monday aftermath

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Video

Gerald Dickey, steelworker and union official -- on what happened immediately before and after Black Monday and the aftermath.

Two men – one a rookie Vindicator business reporter when Black Monday occurred, the other, a long-time steelworker and union activist – bring individual perspectives to the collapse of the steel industry in the Mahoning Valley.

VIDEO: Gerald Dickey on Black Monday aftermath

VIDEO SET: Steel industry in the Valley

“I’m sure that you understand my need to stand up for the workers during the period leading up to the mill closings in the 1970s,” said Gerald Dickey of Poland, who worked in several mills in Youngstown and Warren and was a local and international steelworkers union official.

“I worked in a mill built in 1913. Long before I hired in there, the open hearth furnaces had been enlarged but the technology was the same. We kept it running until the LTV merger in 1979 forced its closing. What greater tribute can anyone give these men? Their sweat and toil produced millions of tons of steel while the millions of dollars in profits went elsewhere.”

“We did our job. Others failed us,” Dickey said.

“I honestly don’t recall where I was or how I heard about Black Monday. But, I certainly recall being thrown into the story of a lifetime as a young business reporter, said Thomas Petzinger Jr.

Petzinger, executive vice president for business development for Knopp Biosciences LLC in Pittsburgh, said growing up in Youngstown meant growing up with steel.

“It was the heart of the economy and the foundation of our local identity,” he said.

THE HEAT OF THE MILL

Both men have vivid memories of what life was like in the Valley in the old steel days.

“Our cars picked up taconite [iron ore pellets resembling small marbles] that lodged in the grill when you drove through railroad crossings,” Petzinger said. “Sweeping coke dust from the front porch was a daily ritual for many in the Mahoning Valley. There were bridges where you could see and even feel the heat of a mill through your car window.”

“We took pride that our steelworkers invented the shot and the beer, known traditionally as a “puddler’s helper,” as a way of recovering from a hot shift in the mill. In Pittsburgh, they claimed inventorship of this drink, which they called a “boilermaker,” but we knew it actually originated in Youngstown, because puddlers worked in the mills long before boilermakers did,” Petzinger said.

“When the Cuyahoga River in Cleveland once caught fire and made international news, we were not impressed because that happened all the time on the Mahoning River. Steel shaped the cultural identity of Youngstown. Our strong Italian heritage dated to the immigration of southern Europeans during the glory decades of the mills. The wealthy families that owned Sheet & Tube were patrons of the arts and education.”

WARNING SIGNS

There were warning signs of impending problems, but steel was so fundamental to their beings and seemed so durable that people couldn’t see them.

For example, Petzinger said that before Black Monday he was working in The Vindicator’s Warren office when a regional planning organization in Niles, the Western Reserve Economic Development Agency, was warning about troubles to come because of Japanese imports and high labor costs.

“The mill owners had failed to modernize their plants, making them less competitive. The mills grew up on cheap energy, but the oil shocks of the 1970s exposed the inefficiency of their energy use. People didn’t want to believe the warning signs, but they were as real as a force of nature, ” Petzinger said.

“Black Monday was a shock that everyone should have seen coming, but didn’t,” he added.

Dickey, who was raised in Struthers and lived in Boardman, was recording secretary for United Steelworkers Local 1462 and was editor of the publication Steel Labor for six of the 12 years he worked at steelworkers headquarters in Pittsburgh.

He also edited the Brier Hill Unionist and the Warren Steelworker when he went to work for WCI in Warren, which was a former Republic Steel mill.

He chronicled some of the events leading up to Black Monday and thereafter.

In August 1977, at an unprecedented meeting at the Campbell Works office, management told union representatives to ignore the rumors that the mill was in trouble and said the company would be fine.

“Of course, the union guys leaving the meeting agreed that the opposite was probably true,” Dickey said.

On Sept. 18, the Lykes Corp. board of directors met at Pittsburgh International Airport and voted to shut down production facilities in Youngstown, but said production of seamless pipe would continue with rounds supplied by the Brier Hill plant.

The next day, Sept. 19, the Campbell Works shutdown announcement came at 10 a.m., and departments began ceasing production immediately. The Brier Hill plant remained open and was not a part of the announcement.

MORE TO COME

In November 1977, Lykes, a steamship company, announced plans to merge with LTV Corp.’s Jones & Laughlin Steel Division

During this time, the company’s general manager told union representatives that the Brier Hill plant was among the most efficient in the country, producing the rounds for seamless pipe at just $5 per ton more than BOF [basic oxygen furnace] production, and that quality was excellent.

Brier Hill was closed at the end of December 1979.

U.S. Steel closed its Youngstown operations a few months later.

Dickey was hired at Republic Steel’s Warren plant in January 1981. Soon after, LTV acquired the company, but did not want the Warren plant, which was sold and renamed Warren Consolidated Steel and later WCI Steel. But for its survival, the plant needed a continuous caster – which solidifies molten steel into a semi-finished form subsequently rolling in the finishing mills at less cost and greater yield – to replace an antiquated blooming mill.

Dickey said the workers voted to accept a four-year labor agreement that paid an immediate 25 cents an hour wage increase and nothing more. The understanding was that the company would build a new $100 million continuous-caster production facility. The plant survived and continued production until the early 21st century, he said.

After several changes in ownership, the Warren plant needed tens of millions of dollar in repairs and upgrades. With no investment available, the company declared bankruptcy. It was sold at auction to a scrap dealer that dismantled it.

“The site sits empty today, unrecognizable with only rubble scattered about like a scene from a war that had been badly lost,” Dickey said.

DISBELIEF AND DENIAL

The immediate aftermath of Black Monday was disbelief and denial, said Petzinger.

SDLqThe Vindicator sent two reporters, including this reporter and Timothy Yovich, to Washington, D.C., to find out if President Carter would somehow correct the situation. After all, the Mahoning Valley had put Carter over the top in Ohio, which gave him the election. Of course, there was little the White House could do, except to authorize extended unemployment benefits, which temporarily cushioned the blow,” Petzinger said.

Local politicians and planners in Youngstown and Pittsburgh came together to form the Steel Communities Coalition to lobby for a rescue of the industry, but it never happened. The Diocese of Youngstown launched a well-intentioned but na Øve effort to lead a community takeover of the Campbell Works. Liberal activists and economists flocked to the region to promote a worker-led purchase of the mill. Local banks created “Save Our Valley” savings accounts with the hope of raising investment capital to restart the mill.

But, it was not going to happen.

“The mills were closing because they flat-out couldn’t make money in a global market,” Petzinger said.

“I was privileged to cover these events as a freshly minted business reporter, right out of journalism school. Months after Black Monday, I got a call from the Wall Street Journal Bureau in Pittsburgh. They had been reading The Vindicator’s coverage of the steel crisis and offered me a reporting job”

“With that, I became one of the few people to benefit from the economic crisis in my hometown,” he said.

FINDING FOOTING

Over the decades that followed Pittsburgh came back in a way that Youngstown couldn’t, at least for a long while.

The difference was that Pittsburgh had honest and visionary political leadership, major research universities and hospitals, and a century-old legacy of steel wealth that invested in arts, education, and the local environment.

“Today, I work in a Pittsburgh technology area along the Monongahela River where the Jones & Laughlin rolling mills once stood.”

“Youngstown didn’t have the endowments Pittsburgh had, so it’s taken decades longer to find its footing and march into the future,” he said.

“But, from a distance it certainly seems to be making progress. It’s thrilling, for example, to watch my childhood friend Jim Cossler and his team at the Youngstown Business Incubator put the city back on the global map,” said Petzinger.

Still, Dickey retains nostalgia for his colleagues in steel.

“I pay tribute to the Youngstown and Warren steelworkers,” Dickey said. “No one had more passion and knowledge about steel-making. We were like family.”