Chesterton Tribune                                                                                   Adv.

GM bailout was good news for NWI

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No one knows how big a hit Northwestern Indiana’s steel mills would have taken had General Motors been forced to shutter its operations.

But it’s clear that the U.S. government’s $50 million bailout of the auto giant served as a lifeline as well to the region’s steelmakers.

“GM is a very big customer” of ArcelorMittal,” United Steelworkers Local 6787 President Paul Gipson told the Chesterton Tribune today. “If GM had gone out of business completely, it would have had a negative impact on us for sure. No question.”

“We would still be operating at Burns Harbor,” Gipson added. “But we would not be operating as well as we are. We’re still not at our peak. Business is not what it had been in ’07-’08. I don’t know if we’ll ever return to those levels.”

Gipson noted that the entire domestic auto industry sold between 14 and 14.5 million units annually in 2007 and 2008, record-setting years for the steel industry. Then, when the bottom fell out of the economy, beginning in the fall of 2008, that number dropped to around 11 million units. Twelve million is the threshold number, Gipson said, at which the steel industry can make a decent go of it. “Thirteen million units would be a sign that the economy’s coming back.”

ArcelorMittal’s Burns Harbor facility, with a capital commitment from the company to keep its two blast furnaces maintained, is right now positioning itself to be a “very attractive” customer for GM, Gipson said. “Well maintained furnaces are a must if you want to get the auto business.”

U.S. Steel Corporation (USS)—which is also a supplier to GM—declined to comment on the bailout today. “In keeping with our policy, we don’t discuss our relationship with customers,” USS spokesperson Erin DiPietro said. “And we can’t speculate on what the potential impact to our facilities would have been if GM hadn’t received that backing.”



Posted 11/18/2010




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