Steel industry overview and applications

¶ … United States Steel Industry and its current status on the world market. First, this paper will look at briefly the history of the Steel Industry. Second, this paper will provide an overview of how the industry is doing currently. Third, the paragraphs below will include a SWOT Assessment of the Steel Industry. This means that the industry's strengths, weaknesses, opportunities, threats and trends will be evaluated.

History of the Steel Industry

For as long as the United States has been a nation, steel has been an important industry. It began with iron mining in Virginia and Massachusetts and by the year 1700 the Americas were producing 2% of the world's iron. Demand grew and as a result so did production the a specific iron called pig iron. "In 1723 only fifteen tons were exported, all from Virginia and Maryland" (Gordon, 2004, par. 3). By the Revolutionary War, the United States was the producer of a seventh of the world's supply of iron. After the war, these numbers increased markedly as mills producing nails, hinges and plows were built in other states.

Up until the Civil War, the United States imported most of its steel. With the advent of steam technologies, this changed and opened a whole new market. After the Civil War, the Steel Industry grew at astonishing speed as the nation's new economy expanded to become the world largest. During this time "steel production increased from 1.25 million to more than 10 million tons" (Gordon, 2004, par. 11). This growth continued through the World Wars but peaked in 1969 at 141,262,000 tons produced. The industry was facing competition abroad that could make more steel faster and incurring less expenses. By 1988, production was at 102,700,000 tons but the industry showed signs of weakness as it started to lose employees (Gordon, 2004, par. 15). United States Steel is once again competitive on the world market but the Steel Age has been replaced by that of the computer and microchip.

Overview of the Steel Industry

Vicki Smith (2005) writes, "Borders have blurred as the ever-changing Steel Industry goes global, with fewer major players duking it out" (par. 4). The global market has made it possible for American's to produce steel for a German company. Where the United States industry used to be the giant, a growing trend is to look abroad for better steel. Not jus European countries are on the forefront of the action. The United States Steel Industry is facing competition from China. American producers have lacked the consolidation other countries have as the American supply starts to dwindle, more plants close and blue collar towns die. It make the situation worse, the United States started importing cheap steel from countries not to mention new trade law agreements imposed by Bush. All of these changes has left the American Steel Industry rebounding.

SWOT Assessment

Strengths

The United States Steel Industry has an established infrastructure, centuries old that includes a tight labor union. The nation is also at war and need of steel to build planes, weapons and transportation systems in Iraq. American steel has a global reputation and the technology to enhance a global marketplace.

Weaknesses

In recent years, there has been a reduction in the Steelworkers union and towns relying on the industry have disappeared. As a result, morale is low. Also better management of supply is needed to compete on the global scale.

Opportunities

Endless opportunities are available when thinking in the multi-national mind set. The United States has a reputation of helping other countries build and rebuild, these relationships are opportunities for global expansion. Aiding in conflicts across the global will also act to stimulate new possible avenues of demand.

Threats

Threats consist of foreign competition from not only European countries but also China. These countries are able to produce better steel faster and at a cheaper production rate.