Tuesday, November 3, 2009

Steel Pipe Geopolitics: Youngstown, France

Mayor Jay Williams in Paris after a meeting in Berlin is a great example of the globalization of local politics. National governments are cut out of the conversation. That doesn't mean that the nation-state is retreating from the international stage. However, subnational regions must have a coherent geopolitical strategy. The lesson from V&M Star:

“Obviously the market forces need to be trending in a direction that makes sense, and there’s a lot of things that go into that, but there was a sense of optimism as they looked out over the time horizon,” Williams said.

Along with the specific site and project, Williams said he also discussed with the executives the company’s overall strategy, market forces and other factors involving the decision and their timeline. “But I feel very comfortable that the Mahoning Valley site is very high up on their agenda and their radar screen,“ he said.

One of V&Ms concerns is with the unfair trading practices used by some of its international competitors, such as China, they said, and company officials hope that the United States will take “appropriate action,” according to Williams.

Last week, the U.S. International Trade Commission voted 6-0 to approve an investigation into imports of $380 million in subsidized steel pipe from China. The investigation, which could result in duties of nearly 100% on the imports, followed a petition filed by V&M and other domestic steel companies.

Williams said he would be testifying in December on the “first-hand impact” of unfair trade practices on communities like Youngstown and the Mahoning Valley, and why duties and countervailing measures should be implemented “should China continue these actions,” he said.

A company headquartered in France is demanding US protectionism on imports from China. Impacts on the economic geography of the Mahoning Valley are complicated. A bit of good news for Pittsburg, CA could be bad news for Youngstown:

In a welcome contrast to local factory closures, a venture of manufacturing companies from the United States and South Korea has opened a $135 million East Bay plant here that will make big pipes for the energy industry.

United Spiral Pipe's new state-of-the-art factory in Pittsburg will employ about 150 people, with room to expand.

The plant produces large-diameter pipes used for transmission of natural gas and oil.

The 340,000-square-foot welded pipe factory is a joint venture of American steel titan U.S. Steel Corp., South Korean steel maker POSCO and South Korean tube products maker SeAH Steel Corp.

The opening of the new plant comes at a time when the looming shutdown of the NUMMI auto factory in Fremont has ripped open numerous economic wounds.

"These are good jobs and these are well-paying jobs," said Pittsburg Mayor Nancy Parent.

Sound familiar? It should. I see a connection between the V&M Star expansion in Youngstown and the natural gas boom headquartered in Pittsburgh, PA. In other words, I'd be shocked if the plant ended up anywhere else but in the Mahoning Valley. Williams can help the company in Paris push the United States to punish cheap steal made in China. The POSCO deal in the Bay Area reveals the bluff. Domestic production is still a strong bet despite the accusation of unfair trade practices.

Youngstown holds all the cards.


  1. Welded pipe is a vastly different product than seamless pipe, so a welded pipe plant in Pittsburg, CA would not neccesarily result in competition with V&M Star.

  2. Rick,

    I've seen references to the oil and gas industry for both steel manufacturing plants. Do you know what the products are used for(e.g. "fraccing")?