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THE STEEL INDUSTRY CENTER

CARNEGIE MELLON UNIVERSITY AND
UNIVERSITY OF PITTSBURGH    EST. 1991
PROFESSORS RICHARD J. FRUEHAN AND FRANK GIARRATANI, CO-DIRECTORS

http://www.industrystudies.pitt.edu

   The American steel industry has been aptly described as one of “recurring crisis.” It also is an industry that portrays the dynamics of market competition extremely well. Its modern era has been marked by two major upheavals in the last twenty years. The U.S. recession in the 1980s exposed long-standing needs for reform that were met by a dramatic restructuring of markets.  This led to the emergence of modern steel mini-mills as a major competitive force in domestic markets, and it also led to the downsizing and revitalization of firms among the industry’s traditional integrated steel producers. The industry’s return to profitability in the 1990s was short-lived as its hopes of financial gain in an era of expanding markets were dashed on the hard realities presented by the Asian economic crisis and a devastating surge in imported steel.

   The Steel Industry Center engages in research that is of critical importance to the competitiveness of the U.S. steel industry by focusing on three areas: technology, market analysis, and human resource practices. Key findings from this research were published in The Renaissance of American Steel: Lessons for Managers in Competitive Industries, which demonstrates lessons from the steel industry’s transformation in the 1980s, particularly the relationship between good investments and market success. 

   Other Center research includes a major study benchmarking manufacturing efficiency and technology and their relationship throughout the industry. Its findings were used by a number of companies to examine their production facilities and make improvements in their operations.

  
   Research on market analysis lead to the development of a unique model of geographic pricing and commodity flows among highly detailed U.S. regions.  The Center investigation, Human Resource Practices and Productivity in Steel Finishing Lines, assessed the impact of innovative human resource management practices on productivity in integrated mills using data gathered from 35 plant visits. The findings of this study were published in the field’s pre-eminent journal, the American Economic Review, and researchers were invited to present findings to numerous universities and industry conferences. As exemplified in these projects, the hallmark of the Center’s research is that of scholarship based on a deep under-standing of firms and the markets in which they compete.

   Ongoing research initiatives continue the Center’s focus on technology, market analysis, and human resource practices. The analysis involved in this work touches on the causes and possible remedies related to the industry’s challenges and the role of computing power and advanced computer software in the performance gains realized by specialty steel fabricators. In each area, knowledge based on direct communication with firms underlies scholarship that can help to support industry competitiveness and contribute to public awareness and understanding of industry dynamics.