Government, Firms Join Forces in Worldwide Race : Steel Industry Pins Hopes on High Tech

CHICAGO — Steel companies and the federal government are making a concerted effort to develop revolutionary production methods that will reinvigorate America’s once-powerful steel industry.

Experiments on as many as five new ways of casting steel are under way, but the same countries that have grabbed huge chunks of steel market share from U.S. producers are also in the race to develop new technology.

“It’s quite clear that we’re not the only ones with these new technologies,” said Dr. Herbert Northrup, an expert on steel at the Wharton School of Economics.

While Japan and European Community nations have been the most potent competitors up to now, Northrup said, “I think the competition from lesser developed nations, such as South Korea, Brazil and Taiwan, may pose a greater threat.”

To keep the new technology out of the hands of rivals, all the scientists at Argonne National Laboratory near Chicago and other federally funded research centers working on the “Steel Initiative” have signed a statement saying they will not disclose details of their work to anyone.

Even without new methods of making steel, some American steel companies have already staged an impressive, if gradual, recovery.

U.S. steel production in 1987 will total an estimated 86 million tons, up slightly from last year but well down from the 1973 peak of 151 million tons.

A slumping dollar that has made American-made steel more price competitive, and negotiated government-to-government quotas that limit foreign steel imports, have fueled the steel revival, industry analysts say.

The industry has also helped itself by modernizing plants and shutting antiquated ones. Nearly every firm has installed continuous steel casters that reduce the number of steps needed to shape the final product, something the new technologies would advance further.

However, the cost per hour of the U.S. steel worker remains substantially higher than his Japanese counterpart at $23.77 against $16.05, with both nations suffering against the paltry $2.30 paid to South Korean steel workers.

The American steel industry provided jobs for 399,000 workers in 1980, but there were only 150,500 blue- and white-collar employees at the beginning of this year, according to statistics from the American Iron and Steel Institute, a trade organization.

Hence the need for the “Steel Initiative,” conceived in 1984 by the White House science adviser George Keyworth to help keep remaining hearths open.

So far, $9 million has been appropriated for the program, with the steel industry providing a matching stake of about one-third.

In the Argonne National Laboratory, physicists tinker with powerful magnets as they attempt to levitate molten steel on an electromagnetic field and then flatten it into a paper-thin sheet. The new process could cut in half the cost of shaping sheet steel.

The team of government and industry scientists has yet to succeed in floating red-hot steel, and project organizers give the technology little chance of producing a true breakthrough in shaping steel.

Keith Kappmeyer, vice president of research and technology at the nation’s largest steel-maker, USX Corp., admits that the sheet steel process is “still a gleam in peoples’ eyes.”

But, he added, “we see it as a crux technology. The essence of research and development is that one has to take a longer view.”