Cleveland-Cliffs officials stress value
BUTLER TWP — Cleveland-Cliffs Inc. officials Wednesday stressed the importance of their components and the vital role they play in national security during a meeting with local legislators.
Many who spoke at Wednesday's meeting said supporting Cleveland-Cliffs could bring stability to the economy locally, regionally and nationally.
“It's a matter of national security,” said Hank Leyland, a trustee of the union and recently retired 37-year employee of the Butler plant.
Federal, state and local legislators attended Wednesday's conversation at the UAW Local 3303 office, 112 Hollywood Drive. They included U.S. Congressmen Mike Kelly, R-16th, and Conor Lamb, D-17th; state Rep. Marci Mustello, R-11th; and county Commissioners Leslie Osche, Kim Geyer and Kevin Boozel.
While focus remained largely on what makes the plant special, there was plenty of conversation about competition.Frank Gaudino, a senior research and technical employee for the Butler Works, led legislators through the basics of the grain-oriented electrical steel the plant manufactures and how foreign companies have been circumventing tariffs that equalize the playing field.Gaudino, along with Patrick Bloom, vice president of government relations for Cleveland-Cliffs, spoke in tandem about its sales being undercut by those of foreign competitors from countries such as China, Japan and others.Bloom said competitors in these countries are able to circumvent tariffs placed in their paths by using Mexico and Canada as a sort of staging area.Bloom said the steel is still being produced cheaply within their own countries, then sent to Mexico and Canada, where it can then enter the U.S. without penalty.Bloom said the primary buyers of their electrical steel are transformer producers, and those producers are often buying much of their materials at the lowest dollar. But if the pricing disadvantage is taken away, he said the Butler Works would excel through its quality production.“The folks here do it as well as anyone in the world, as efficiently as anyone in the world,” Bloom said.Gaudino agreed.“We feel like we can compete with anyone when we're on an even playing field,” Gaudino said.However they also stressed that there could be more ways to support the business in the future.
Gaudino said there is no other manufacturer of grain-oriented electrical steel in the country, which means every transformer being installed in the U.S. has either Cleveland-Cliffs electrical steel or their international competitors.“It's a small, tiny niche, but it's a critical niche,” he said.Grain-oriented electrical steel is primarily used in transformers, which help supply electricity from the power plants to homes through a series of current increases and decreases.“Typically there are seven transformers from the power plant to your home,” Gaudino said. “They allow you to transport it very cheaply and very efficiently.”As Gaudino explained it, any type of steel could be used in a transformer, but a normally manufactured steel has grains that wander in any given direction. When electricity passes through this steel, the current fights against itself and creates resistance, which causes losses.By organizing the grains to go in one direction, that resistance is lessened, and it makes transferring the electricity more efficient.Gaudino said every company who makes this type of steel has the same 17-step process for organizing those grains, which happens through molecular manipulation.He said it's the minute chemical compositions that really set manufacturers apart, and the comparison point is how much electricity gets lost traveling through the lines.“There's still a tremendous amount of proprietary information out there,” Gaudino said. “What separates a lot of grain-oriented manufacturers is how well they can balance their chemistry.”
While discussion of future tariffs was limited, some conversation both by legislators and Cleveland-Cliffs representatives shifted more toward the national infrastructure bill approved by the U.S. Senate in August.That bill, awaiting action in the U.S. House, would spend $1 trillion on the country's infrastructure, including roads, bridges and the power grid, among other areas.Gaudino estimated the bill could produce about $70 billion toward bolstering the nation's power grid, and without Cleveland-Cliffs' electrical steel, it would be largely dependant on foreign interests, and giving them control over the essential transformers that facilitate that grid.Leyland said he would like to see the nation retain control of its grid.“When we have a reliance on an outside foreign entity for our infrastructure, we leave ourselves vulnerable,” he said.During a period of questions and comments, Kelly said he appreciates global competition, but he would like to see Cleveland-Cliffs benefit from the infrastructure bill.Kelly said he believes no material going into the manufactured product should come from foreign sources.“It better be made in America,” he said.Lamb asked if Cleveland-Cliffs could accommodate the increased demand if the bill is approved.Bloom said it would.“We could probably absorb a lot of that (demand),” he said.
Legislators in attendance agreed that they would like to see Cleveland-Cliffs benefit from the proposed bill, but the key is to stress the security concern to their colleagues.For Mustello, the meeting brought new ideas on how legislators can support the company.“This amplifies the importance of Cleveland-Cliffs to Butler,” Mustello said. “It's up to me to get that message out.”For the county commissioners, they were happy to bring that message forward.“I think it was a great opportunity for us to be in the same room and having this conversation,” Geyer said.Osche said their goal is simple: to keep the Butler plant strong and embedded in the community.“It reiterates what we've been saying,” she said.For Boozel, words are just one part of change, and now it's time for the decision-makers to spread the information and influence policy.“Everyone seems to be on board,” he said. “That's what'll move that ball and keep it on the top of minds.”
