ARI SHAPIRO, HOST:
Last week President Biden came out against the proposed sale of the company U.S. Steel to a Japanese company, Nippon Steel. That proposed sale of what was once a giant American business symbolizes how far the steel industry in the U.S. has fallen. Erika Beras from NPR's Planet Money podcast has the story of a moment that led us here.
ERIKA BERAS, BYLINE: For a century, steel was made the same way. Limestone, iron and coal would get melted down, turned into steel that then became train tracks, bridges, refrigerators. Rutgers economics professor Tom Prusa says starting in the 1950s, trouble was brewing. Steel in the U.S. was facing foreign competition and high labor costs.
TOM PRUSA: The steel industry looked very, very healthy. But if you look underneath, the beginnings of the problems were there.
BERAS: And by the late '80s, steel was in decline. Big mills had closed, and the industry had lost nearly 60% of its workforce. Meanwhile, there was a new type of steel company that used a smaller machine. They used mini-mills to make small things like nuts, bolts, rebar. One of the companies doing this was called Nucor. Tom says at first, the big steel companies weren't too worried about these newcomers.
PRUSA: So if Nucor wants to sell their steel in that segment, they can have it 'cause we really want to go upscale. We want to actually focus on where the high profit is.
BERAS: For big steel, the high profit was in flat, rolled sheet steel, the steel used to make buildings and cars. But then Nucor decided to do an ambitious thing - to try to use mini-mills to make the profitable steel.
KEITH BUSSE: No mini-mill had ever made sheet steel before anywhere in the world.
BERAS: It was Keith Busse’s job to get this new mini-mill to work. He says the biggest obstacle was the technology. Like, they were going to use an electric arc furnace, but getting it to work was hard. The sheets of steel would have solid edges but still be liquid in the center.
BUSSE: Yeah. You had your steak well-done on the outside but medium rare on the inside.
BERAS: So they kept tinkering.
BUSSE: The temperatures weren't right. The speeds weren't right. And therefore, it was burning through the shell. And then the metal would just gush out everywhere.
BERAS: For every new problem, Keith and his team would have to modify the machines. And after almost two years, they were finally able to make big sheets of steel.
BUSSE: It was exhilarating. It was fascinating. And listening to an electric arc furnace go off melting scrap metal, Erika, sounds like a hundred thunderstorms crackling at one time.
BERAS: U.S. Steel was one of the last big American steel companies standing. And now it may be owned by a Japanese company. I asked Keith, how do you see your role in all of this?
BUSSE: I mean, nothing stands still. The old ways pass, and new ways replace them. The U.S. steel industry was the most powerful steel show on Earth after World War II, but it rested on its laurels. You can't rest on your laurels.
BERAS: The rise of the mini-mills is kind of classic. The big, incumbent companies get overtaken by a scrappier outsider. And then the outsider becomes the incumbent. Nucor is now the biggest steel company in the country. Erika Beras, NPR News.
SHAPIRO: And Erika has the full story of what happened to the steel industry in the U.S. on this week's Planet Money program. Transcript provided by NPR, Copyright NPR.
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