Category Archives: Economy

Conway Workers, Local Leaders Caught Off Guard By Norfolk Southern Job Cuts

By Chrissy Suttles
Beaver County Times

Sep 4, 2019 – CONWAY — Norfolk Southern Railway did not give local leaders prior notice before cutting more than 50 employees at the Conway Yards switching station Tuesday.

“I read it in the newspaper this morning,” Beaver County Commissioner Tony Amadio said, echoing statements by state Sen. Elder Vogel Jr., R-47, New Sewickley Township, and others throughout the county.

When management told roughly 55 mechanical workers they would be laid off, many were caught off guard.

“It was mostly mechanics and electricians who were let go,” said one person who still works at Conway Yards and spoke on the condition of anonymity. “Someone from corporate came in to reassure everyone afterward, but he sidestepped our questions. We’re frustrated with how it’s been handled.”

Those who lost their jobs will retain a number of company benefits for the next several months, but it’s unlikely anyone will return to work.

Norfolk Southern announced an additional 100 layoffs at the Juniata Locomotive Shop in Altoona, but some of those electricians may relocate to Beaver County to work at Shell Chemicals’ ethane cracker plant, the Altoona Mirror reported.

The Conway Yards, which snakes along the Ohio River in Freedom and Conway, is one of the largest rail yards in the country. Norfolk Southern Vice President of Communications Tom Werner said the eliminated positions were no longer vital to railway operations as the company moves to precision-scheduled railroading – or parking locomotives, cutting travel time and reducing jobs to better match peer performance.

Earlier this year, railroad representatives revealed plans to eliminate 3,000 positions companywide by 2022 to hit financial goals. While a declining coal industry is partly to blame, the Virginia-based rail carrier has gradually increased its transport of chemicals, steel and lumber in recent years.

“On-time performance and train speed is hitting records highs, and terminal dwell is becoming lower than any time in memory,” Werner said. “That’s all good for serving the customers. The downside for our employees in mechanical is that fewer locomotives means fewer locomotives to be maintained.” Continue reading Conway Workers, Local Leaders Caught Off Guard By Norfolk Southern Job Cuts

U.S. Steel’s Market Value Drops $5.5 Billion Thanks to Trump’s Tariffs 

Pittsburgh City Paper
According to several reports, Pittsburgh’s largest steel company — and the second largest in the country, has lost about 70 percent of its market value thanks to forces put into place by President Donald Trump’s steel tariffs.

Since Trump announced tariffs on foreign-made steel 16 months ago, U.S. Steel’s market value has dropped by $5.5 billion. Even though steelworkers at U.S. Steel lauded the tariffs when Trump announced them last year, the Los Angeles Times points out how the dynamics set in motion by those tariffs actually hurt steel companies with legacy steel mills with blast furnaces, like U.S. Steel.

From the LA Times: “Exuberance over the levies dramatically boosted U.S. output just as the global economy was cooling, undercutting demand. That dropped prices, creating a stark divide between companies such as Nucor Corp., which uses cheaper-to-run electric-arc furnaces to recycle scrap into steel products, and those including U.S. Steel Corp., with more costly legacy blast furnaces.”

The tariffs boosted steel production for all domestic steel producers in the short term, but as actual demand for steel dropped, U.S. Steel struggled to compete with lower-cost competitors like Nucor Corp. With international steel nudged out of the market by the tariffs, domestic steelmakers responded to fill those gaps, but U.S. Steel got beat in the market by steelmakers with more efficient electric-arc furnaces. Basically, the tariffs created a new market of mostly domestic steelmakers, but the new market actually gave more advantages to Nucor and less to U.S. Steel.

Bank of America analyst Timna Tanners told the LA Times it was “ironic” that the tariffs are “punishing some steel companies.” She also noted the dangers of the steel industry to add capacity without sufficient demand.

Since March 2018, U.S. Steel has idled two of its steel mills in Michigan and Indiana. In the past, U.S. Steel had voiced support from Trump’s tariffs.

Another steel company in the region is also claiming negative effects from the tariffs. Last week, steel producer NLMK USA in Mercer County laid off between 80 and 100 workers. According to WESA, the CEO of NLMK USA blamed the cuts on Trump’s steel tariffs, saying that the Russian-owned company faced steep prices on Russian-imported steel slabs.

Pennsylvania U.S. Sen. Pat Toomey (R-Lehigh), who has been critical of Trump’s tariffs, says both situations show the tariffs are not working as promised.

“As out-of-work steelworkers, like those at NLMK in Sharon, can attest, the administration’s protectionist steel tariffs have not resulted in the promised financial gains even for steel companies,” says Toomey. “This outcome demonstrates that imposing arbitrary taxes on imported products can distort prices, disrupt supply chains, destroy jobs, and increase prices for consumers without sufficiently offsetting benefits.”

Even though U.S. Steel has lost most of its market value since the tariffs started, the company still reported a large fourth-quarter profit last year, netting $592 million.

In May, the company announced a $1 billion investment to upgrade its facilities in West Mifflin, Braddock, and Clairton. With the upgrades, these three facilities will become the central source for high-strength, lightweight steel used for the automobile sector.

But with the upgrade comes an increase in efficiency, and experts told the Pittsburgh Post-Gazette that U.S. Steel will likely cut jobs at the Mon Valley facilities in the future.

And it appears Trump’s tariffs haven’t had that positive of an impact on steel jobs nationwide. According to the Washington Post, the tariffs “didn’t lead to a major increase in manufacturing jobs, largely because modern mills don’t require more manpower to operate at a higher capacity.”

Continue reading U.S. Steel’s Market Value Drops $5.5 Billion Thanks to Trump’s Tariffs 

Court rules in favor of Beaver County power plant workers in FirstEnergy dispute

The Bruce Mansfield plant owned by FirstEnergy Corp. in Shippingport, Beaver County.

By Luke Torrance
Pittsburgh Business Times

Jul 8, 2019 – A federal appeals court has ruled in favor of about 230 union power plant workers in Beaver County, supporting the union’s claim for $5.5 million in back wages.

In a decision filed last week in Cincinnati, the U.S. Court of Appeals for the 6th Circuit said that FirstEnergy Solutions Corp. had committed an unfair labor practice when it imposed a contract on the International Brotherhood of Electrical Workers Local 272 workers at the Bruce Mansfield coal-fired plant, located in Shippingport.

The contract between FirstEnergy and the union expired in 2014; after a year of negotiations, the company declared an impasse in October 2015. FirstEnergy implemented a contract that contained some previously discussed provisions, such as the elimination of retiree health subsidies for all in-the-box retirees by the end of the year. But provisions that the union had fought for, such as a wage increase, were not implemented, resulting in the union filing an unfair practice charge. Continue reading Court rules in favor of Beaver County power plant workers in FirstEnergy dispute

PA Minimum Wage No Longer Defensible

In this March 8, 2016, file photo, Pennsylvania Gov. Tom Wolf meets with diner patrons before discussing his executive order to increase the minimum wage for state government employees and workers on jobs contracted by the state, during a news conference at the Trolley Car Cafe in Philadelphia. (Photo11: Matt Rourke / AP)

By York Dispatch Editorial Board

Feb. 22, 2019 – Pennsylvania’s minimum wage is $7.25 an hour. That’s $58 a day; $290 a week; $1,160 a month. Before taxes.

It hasn’t gone up a penny in 10 years. And it was only increased in 2009 because the federal government mandated it. Neither federal nor state lawmakers have added to this pittance since. They should be embarrassed.

In fact, $7.25 an hour was insufficient 10 years ago; it is insulting today.

Gov. Tom Wolf would like to rectify this shameful situation. Republican lawmakers who control the General Assembly, unfortunately, are evidently shameless.

The governor is again proposing an increase in the state’s minimum wage — something he has done each year since he took office in 2015. His proposed $34.1 billion spending plan would hike the lowest legal wage to $12 an hour this year, then nudge it by annual 50-cent-an-hour increments to $15 an hour by 2025.

Unfortunately, more livable wages are something many GOP lawmakers believe Pennsylvania can live without.

As Wolf’s budget plan began wending its way through Harrisburg’s legislative gauntlet, his minimum wage proposal attracted many a critical GOP eye. Continue reading PA Minimum Wage No Longer Defensible

Opposition Growing Against Natural Gas Pipeline To Supply Beaver County Cracker Plant

Dec 3, 2018 – BEAVER, PA. (KDKA) — Some pipelines in the region have ruptured, causing massive explosions. Others under construction, like the Mariner East pipeline, have been slapped with hundreds of violations for spills.

Now, opposition is growing for another pipeline to supply the cracker plant in Beaver County.

With the sprawling $6 billion plant under construction on the banks of the Ohio River, Shell Oil promises to bring thousands of jobs and economic vitality back to the county.

The mammoth plant also, however, brings safety and environmental concerns, including the proposed pipeline that will bring it natural gas.

“There’s never been a pipeline that never leaked. That’s a fact. Every pipeline leaks sooner or later, and some of them, as we just saw in Center Township, they explode,” Bob Schmetzer, of Aliquppa, said.

New natural gas pipelines are criss-crossing the state, and the Energy Transfer Company gas line exploded less than a week into its operation. The fact that the explosion was caused by shifting ground doesn’t inspire confidence in homeowners like Rachel Meyer.

“We certainly know that this past year with the rains, we’ve seen a lot of landslides, and it looks like that was the reason that that happened. So, you know, it’s scary that there wasn’t more preparation and understanding that that could have been something that would happen,” Meyer said.

The cracker plant will need a continual supply of ethane gas to crack or transform into plastics. Shell is proposing the two-legged, 97-mile Falcon Pipeline to bring the gas from Washington County, Ohio and West Virginia.

But it will need to cross streams and wetlands like the Beaver County Conservation District and the headwaters and water line of the Ambridge reservoir that supplies more than 6 million gallons of water per day to people in Allegheny and Beaver counties.

Residents like Bob Schmetzer worry about pollution and spills contaminating the water supply.

“This needs another route. Stay out of the watershed. Take it around. Do what you have to do, but don’t come through here and jeopardize 100,000 people and a whole economy,” he said.

For its part, Shell says it has spent two years working with landowners and engineers to put establish pipeline route, taking into account environmental concerns and planning safeguards for streams and water sources.

In a statement, the company said: “Shell executed numerous environmental studies and intends to take other steps to avoid or minimize any potential environmental impacts that could arise as a result of construction and operation of the Falcon Pipeline. Protecting the environment and ensuring the safety of communities where we operate is Shell’s top priority.”

Still, the Ambridge Water Authority opposes the route and the state Department of Environmental Protection has sent the oil giant a “technical deficiency letter” withholding construction permits at this time.

The cracker plant is already employing thousands of construction workers and promises to be an economic boon to Beaver County, but folks in the region say that should not come at the expense of the environment or their safety.

Continue reading Opposition Growing Against Natural Gas Pipeline To Supply Beaver County Cracker Plant

Impact of GM Lordstown Shutdown Will Be Felt for Many Years

 

New Chevy Cruze models at Lordstown 

By Jordyn Grzelewski

The Youngstown Vindicator

jgrzelewski@vindy.com

LORDSTOWN, Dec 2, 2018 – Michelle Ripple has experienced the ups and downs of the General Motors Lordstown plant her entire life.

Her father worked at the plant for more than 40 years; she’s worked there for 18. The 49-year-old mother of three works as a carpet retainer installer.

Like many in the Mahoning Valley, the plant has been an integral part of her family’s history and ability to earn a living. Extended family members have worked there, too, over the years. At family gatherings, these were the people who Ripple could talk to about her work, knowing they would get it.

So when Ripple, of Hubbard, was called into a packed meeting at the plant Monday morning – where workers learned that GM will cease production of the Chevrolet Cruze and indefinitely idle the plant beginning March 1 – the news packed a punch.

“[I was] shocked,” said Ripple. “I just stood there like a mummy, not moving.”

She tried to shield her youngest daughter from the news, but the 14-year-old couldn’t miss the nonstop news coverage or talk at her school.

“She’s very emotional,” said Ripple. Her daughter is worried about what will happen with the family’s finances; Ripple assures her they will survive.

Ripple knows this is true – but that doesn’t mean she knows what to do next. She’s weighing her options as March 1 looms. The uncertainty is hard, for her and other Lordstown workers who shared their stories this week.

But despite the grim news, many expressed hope that this isn’t the end of the plant. They’re staving off that thought, at least for now.

That would be too much.

“I’ll have hope until the very end,” Ripple said.

GM PRIDE

It wasn’t clear at the time, but General Motors came to the Valley at an opportune moment.

The plant’s first car – a Chevy Impala – rolled off the assembly line April 28, 1966. A little more than a decade later, the Valley would be brought to its knees by the collapse of the steel industry.

Over a several-year period, steel mills across the Valley shuttered, beginning with the sudden and devastating closure of Youngstown Sheet & Tube Co.’s Campbell Works. The announcement came Sept. 19, 1977 – a date now remembered as Black Monday. Just like that, thousands of jobs went up in smoke. Thousands more steel jobs disappeared in the next few years.

But at least the Valley had GM.

“That was all happening from 1977 to 1980, and at the same time, General Motors was expanding,” said Bill Lawson, executive director of the Mahoning Valley Historical Society. “They had opened the plant in 1966. They added a van assembly plant in the 1970s, and a metal fabricating plant after that.

“So just as the dust was starting to settle … you had 12,000 people employed in the Lordstown complex at General Motors. General Motors took on an even greater significance in the local economy,” Lawson said. “I think it’s critical that the plant was there and employing that many people.”

Employment at the plant has dropped since its peak in the 1980s – two years ago, there were about 4,500 workers there. Now, after two shift layoffs, there are about 1,500.

Through it all, the Valley has maintained a sense of pride in the Lordstown complex and the vehicles it produces, from the Impala to the Chevy Cavalier to the Cruze, which the plant started producing in 2010.

“Any time a community has an employer that large that creates products sold throughout the country and even across country boundaries, people identify with that product,” said Lawson. “You see that definitely in terms of brand loyalty for General Motors – not just the autoworkers and their families because of the discounts, but I think other people have bought GM because they considered it an important part of our economy.”

The shutdown of the plant, then, will have an impact beyond job and revenue losses.

“It will affect Trumbull County’s budget quite a bit – and yes, it’s going to have a very negative impact on our perception of ourself and our self-worth, much as [the collapse of the steel industry] did 35 years ago,” Lawson said.

INDIRECT IMPACT

The economic losses, too, will be significant, economists say.

Experts note that beyond the estimated 1,600 workers expected to be impacted at the plant and other local companies GM contracts with, the effect of the shutdown will ripple across other companies in the plant’s supply chain, into other industries and to communities beyond the Valley.

“The main concern is, beyond the 1,600 or so good-paying jobs that will potentially be lost at General Motors Lordstown, are the indirect jobs that will be affected,” said A.J. Sumell, an economics professor at Youngstown State University. “It’s what, in economics, we call the multiplier effect.”

So, how large is that multiplier?

“It’s particularly large with an employer like a car manufacturer, because you don’t have just the indirect jobs in the service industry, like restaurants and hotels and those businesses where the employees at GM Lordstown would have been spending money,” Sumell said. “There’s a greater impact because of all the jobs that are directly dependent on GM Lordstown – the suppliers of GM Lordstown.”

OTHER COMPANIES

Locally, there are several companies that are directly tied to the plant. Lordstown Seating Systems, which makes seats for the Cruze, reported it would lay off 83 employees earlier this year after GM announced it was cutting the Lordstown plant’s second shift.

A company representative declined to comment Friday on the impact of the plant halting production next year.

Jamestown Industries, which supplies the plant with front and rear bumper covers for the Cruze from its plant in Youngstown, said last week that recent attempts at diversification put the company in a better position to weather the idling of the plant.

“In 2015, we started the process to diversify to insulate ourselves from some of the variability that’s in the automotive industry,” said Lawrence Long, vice president of development for Jamestown. “So while there is uncertainty with regard to the Lordstown plant, we are confident that we will make it through this tough time.”

As for potential layoffs at Jamestown’s Youngstown plant, Long said, “We don’t know for sure how it will impact our workforce. We’re working hard to make sure we keep our workforce intact.”

Jose Arroyo, United Steelworkers business representative for this area, was not as optimistic about the future of Comprehensive Logistics/Source Providers in Austintown, which does logistics and warehousing for GM Lordstown.

With the previous layoffs at the plant, Source Providers laid off more than 350 people, Arroyo said; about 180 employees remain.

“Obviously, the prospects aren’t good, considering GM is Comprehensive Logistics’ only customer,” said Arroyo. “As General Motors goes, so goes Comprehensive Logistics [and subsidiaries] Source Providers and Falcon Transport. We’re extremely concerned, and we’re waiting to hear more from the company.”

Arroyo is also hearing concern from other companies whose workers he represents, such as aluminum and steel companies.

“Everybody is kind of holding their breath right now and hoping the talks with General Motors will end up in a new vehicle or retooling of the plant,” he said.

BUSINESS IMPACT

The impact will be felt by small businesses with less direct, but still significant, ties to the plant.

Our Place Diner in Lordstown is owned and operated by a family with deep GM Lordstown ties.

“My dad retired from GM after 30 years. My brother was laid off with the second shift. My husband was laid off with the third shift,” said Jackie Woodward, whose father owns the diner. “We are just like everybody in this town.”

The impact of the plant on their family’s business is significant.

“A lot of the business in this town relies on the traffic from General Motors and the companies that supply General Motors,” Woodward said. “There are not a lot of people who live in this town. So every business in this town relies on this.”

As for what the future holds for Our Place Diner, Woodward said they are taking it one day at a time and holding out hope.

“We have employees who rely on us. There are customers that won’t be impacted by GM, and you hope to stay open for everybody that needs a place to stop and eat,” she said.

As for how this ripple across the local economy will play out, Sumell said it will take years for the full effect to be realized. And as for what that impact will be, he cited research indicating that lost manufacturing jobs result in other job losses.

“Studies on similar situations have suggested that about three additional jobs [for every lost manufacturing job] would be lost over the course of years – which would put the total in the range of 7,000 or 8,000 jobs lost,” he said.

As a percentage of the Valley’s total workforce of about 220,000, that is fairly significant, he said – and he noted that it would accelerate a long-running trend of the Valley’s employment declining each year.

SILVER LINING?

The good news is that the Valley’s economy is more diversified today than it was back in the 1970s when the steel industry went under – and that trend likely will continue.

“We are much more diversified, which is an outcome of a sad situation – but it’s almost a silver lining of a sad situation,” Sumell said. “Because we’ve lost so many jobs in manufacturing already, we have a relative increase in jobs outside of manufacturing, which are generally less susceptible to massive layoffs.”

In the future, it’s more likely that employment will be spread across a variety of companies – for example, a brand-new, state-of-the-art energy center in Lordstown that cost $1 billion to build employs about 20 people, who earn good wages.

“We’ve become so much more automated, within manufacturing, that there is no single, dominant employer or single, dominant industry in most cities,” Sumell said. “The silver lining to that is, if you have [that] instead of just one dominant employer, or one dominant industry in a city, you have, naturally, a more diversified economy.”

He added: “We are in a better position, today, to deal with this type of blow than we were 40 years ago.”

Who that might not benefit is the GM Lordstown workers who are facing layoffs and an uncertain future. For many, it will be a question of retirement or moving or investing time and money into training for a new career. As Sumell notes, that’s often easier said than done.

But if there is any upshot, it may be that the Valley’s past economic woes have prepared it for this moment.

“We have been dealing with economic devastation for the past 40 years in this area,” Sumell said. “There is a sense of resiliency that is naturally built into our fabric in this community. So I’m confident we will be able to not just survive as a community, but to grow and to become a stronger community in the future.”

Continue reading Impact of GM Lordstown Shutdown Will Be Felt for Many Years

Manufacturing Fuels Growth of Robotics in Central Pennsylvania

Testing Robot at Pennsylvania Precision Cast Parts

By Kim Hart
Axios

Oct 11, 2017, YORK, Pa. — For decades, Rust Belt cities have been seen as decaying manufacturing centers struggling to reinvent themselves. Now, central Pennsylvania — comprised of the smaller cities of York, Lancaster and Harrisburg — is trying to leverage its long history of manufacturing as the foundation for a vibrant robotics hub.

Why it matters: President Trump made dwindling manufacturing jobs a big theme of the presidential election, blaming globalization for the losses. Now many fear that artificial intelligence-infused technologies and robots will kill even more legacy jobs. Some small and mid-sized cities are looking to use their mechanical backgrounds to their advantage.

Why we care: I visited these three cities as part of the “Rise of the Rest” tour led by Steve Case’s firm Revolution, which aims to draw attention to the cities between the coasts that don’t have the same access to capital and reputation for innovation as Silicon Valley, New York or Boston. Pennsylvania got about 1% of the nation’s venture capital last year, a number Case would like to see increase.

By the numbers: Today there are around 12 million manufacturing jobs nationwide, compared to 17 million manufacturing jobs in 2000, according to Bureau of Labor Statistics data. In the York area, 20% of the labor force works in manufacturing — twice the Pennsylvania and national average.

Factory history: The area has a long heritage of factories that crank out both sweets and pretzels. It’s known as the “Snack Capital” — it’s home to Hershey, Utz, York Peppermint Patties and Snyder’s of Hanover. And it’s a big producer of machinery, with Harley Davidson, BAE (which makes tanks) and Voith (which makes hydro turbines) all located here.

Pivot to robotics: A skilled workforce that knows how to work with their hands and tinker with machines is a great fit for building robots, says John McElligott, CEO of York Exponential, which is working on deploying “collaborative robots” (or “cobots”). He believes robots will work alongside humans rather than displace them completely.

The problem: Not enough workers — because people just aren’t enthusiastic about going into manufacturing. “There’s not a skills gap in manufacturing, there’s an interest gap,” McElligott said.

So he set out to nudge the next generation of workers in that direction by opening The Fortress, a robotics and artificial intelligence center in York that also houses a coding and robotics bootcamp.
He expects a “silver wave” of retiring baby boomer manufacturing workers — and their machinery expertise will be needed to train the next generation of robot-builders. Continue reading Manufacturing Fuels Growth of Robotics in Central Pennsylvania