Word: steel
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Dates: during 1980-1989
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Even Hatcher, who feuded with Gary's business community for three terms, has been trying to mend fences. He recently signed a tax abatement bill to spur investment in plants, land and equipment, and has unproved relations with U.S. Steel, which has announced that Gary will become the center of its steel operation. "I could be elected as many times as I want without the support of the business community, but I can't govern effectively without that support," Hatcher says...
...government money. Since 1969 the U.S. has used a variety of methods to protect its industry from imports of inexpensive foreign steel. The result is a standoff that hurts both sides. Hooked on government funds, most European steel companies are weak, inefficient and a drain on their national treasuries. The U.S. Commerce Department has found that government help to some European steelmakers now totals as much as 40% of the value of their products...
...steel industry has also become weak, inefficient and a drain on the American economy. Steel executives have allowed their mills to become outmoded. Observes Harald Malmgren, a trade consultant in Washington: "When you protect any sector, you are shoring up sick companies and prolonging bad management." The steel industry has not, for the most part, used the breathing space offered by protection to modernize its plants. Instead, National Steel Corp. bought some savings and loan associations, and U.S. Steel borrowed $3 billion to acquire Marathon...
Because the American steel industry has been shielded from competition, companies that buy its product pay artificially high prices. That is one reason, economists point out, for the auto industry's troubles, since it is one of the heaviest steel users. Says C. Fred Bergsten, director of the Institute for International Economics in Washington: "In the long run, jobs saved by protection of one industry tend to be offset by the loss of jobs in other industries." In the short run, protectionism is a big contributor to inflation...
...provide capital to help companies become competitive internationally. Says Lundine: "In today's context, we are simply not able to generate the kind of patient capital necessary to foster innovative, emerging enterprises. We are not able to finance the huge reinvestments necessary to restore a world-class steel industry...