Small steel companies finding their niche

By Burton Speakman

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There is a new reality in the Mahoning Valley steel industry, and it’s all about small companies that can adjust quickly.

Though the glory days of the industry locally are long over, the companies that remain are growing. They’re making more products while modernizing and using practices that involve less labor.

The companies that have survived continue to face a variety of challenges and intense competition for their products. Positive signs, however, appear as a few companies seek to expand or move into new product lines.


The most infamous day in the Valley’s history with steel occurred Sept. 19, 1977, when Jennings R. Lambeth, president of Youngstown Sheet Tube Co., announced the company would shutter its Campbell Works in Campbell and Struthers. The date has become known as Black Monday and eventually led to the loss of roughly 5,000 area steel jobs.

Problems in the Valley’s steel industry started well before Black Monday, however.

Steelmaking first developed here because the Valley had ample limestone, coal and water, said Dan Suchora, interim associate dean for research, School of Graduate Studies and Research at Youngstown State University.

But the lack of a water-based shipping method here put it at a disadvantage to steel producers in Cleveland and northwest Indiana, said Chuck Stevens, retired dean of the department of engineering at YSU.

“The Youngstown companies always had higher transportation costs,” Stevens said. “The steel companies saw this and stopped investing in the Youngstown facilities, putting them at a competitive disadvantage.”

Then World War II started and demand for steel was high. At that point, many area businesses built products that supported the steel industry, he said. After the war through the Marshall Plan, the new equipment for steel production made in the U.S. was sent to Japan and European countries to help them rebuild.

“For a while that was OK. Because they didn’t have any expertise, it was better to have older equipment and expertise,” Suchora added.

Eventually, though, the new equipment and experience allowed foreign steel makers to be more competitive, he said. Places such as Youngstown were used for extra capacity when demand was high.

“When demand is low, you’re going to use your most-efficient plant,” Suchora said.

The Youngstown plants were not the most efficient for any of the companies.


The days of the fully integrated steel manufacturers are over here. What remains are a number of smaller companies that make specialty products and change as the market demands.

The industry is now about these smaller companies that make more-specific products, said Todd Olson, president of BOC Water Hydraulics.

“The key is being nimble enough to be responsive,” he continued. “Companies now have to be efficient and can’t have a lot of overhead.”

Responsive companies also will put someone on an airplane immediately if a customer calls with an issue, Olson said.

One industry doing well locally is steel pipe, such as the products made at Vallourec Star. Vallourec makes steel pipe for the oil and natural-gas industry.

The steel-pipe business is strong in Northeast Ohio and in the South in such states as Alabama and Texas, Olson said.

“In general, money and investment dollars are limited as the industry continues to battle fierce foreign competition and downward price pressures,” he said. “The industry has not fully recovered from the downturn of 2008.”

Even older companies, such as Columbiana Boiler Co., experienced a share of change in staying with the steel industry. The company has been open since 1894. The company has done well by focusing on two niche markets: kettles and products for the chemical industry, said Michael Sherwin, Columbiana Boiler’s CEO.

“Smaller companies have the ability to be quicker and have better pricing in some regards,” he said.

Another part of the challenge is finding and retaining quality workers, said Wayne Good, vice president of CBC.

Another focus is getting steel. CBC has to order its steel from just two companies that will make its specialized product, one in the U.S. and the other in Canada. It’s challenging to get materials because the railroads and oil and gas industry are demanding a significant amount of steel, Good said.

Youngstown’s past reliance on the steel industry was economically detrimental, said A.J. Sumell, YSU economics professor.

Sumell said cities that grow the most effectively are able to diversify into different industries, which is why large cities typically grow better than small cities dependent on one industry.

Youngstown does have an advantage when it comes to location for companies that make pipe for the oil and gas industry because of its proximity to both the Utica and Marcellous shales, he said. Proximity overrides some of the import advantages.

The parts of the steel industry, like any type of manufacturing, that are doing well are specialized and mostly automated so they don’t need a lot of labor, Sumell said.

“These places have a big impact on GDP [gross domestic product], but not a big impact on employment,” he said.


In the U.S., businesses simply have to be smarter than their international competitors, Suchora said.

The U.S. will have high regulatory and labor costs. The differences have to be made up somewhere, he said.

That advantage today is transportation costs for domestic orders and energy costs due to low natural gas prices.

“The future for these companies is going to be based on the percentage of hard-working, smart people they can find,” Suchora said.

When looking at the future, companies must be careful about what type of products to take on, Suchora said.

These companies will continue to have to change products and techniques, because foreign competitors over time will be able to figure out how to do processes cheaper, Suchora said.

For Austintown’s custom-steel product producer, Hynes Industries, the idea is to ensure the customer is the focus of the business because customer-responsive companies survive.

“You have to be customer focused,” said Mike Giambattista , senior vice president of marketing and sales.

Hynes offers strip steel to exact specifications, standard and custom roll-formed steel shapes, cold-rolled, wide range of tempers and fine finishes for flat wire, and the versatile FlexAngle Systems used for industrial, commercial, institutional and residential systems.

Hynes’ niche is to provide custom steel shapes for its customers.

“We can provide assembly-ready parts,” Giambattista said. “The more value we can add to the steel the more valuable the product is.”

A large customer of Hynes is Wabash National Corp., an Indiana-based producer of semitrailers and liquid- transportation systems. “We have to be in tune with them,” Giambattista said.

Since Hynes has been in business since 1925, the company has seen both challenging times and good times for the industry.

In recent years, the company has been restructured to have a more dedicated approach and an established presence beyond the Valley.

“You have to have a web presence,” Giambattista said. “You have to be visible to people who do not know you.”

Search-engine optimization is essential to get the desired web hits on the company’s products. It’s still exciting for Hynes to be associated with steel in the Valley.

“It’s a big part historically of who Youngstown is,” Giambattista said. “Steel products are still going to be needed. What we do is try to get creative.”

Over the summer, Hynes announced it would centralize to a new headquarters on Henricks Road and add a new, state-of-the-art, roll-forming line to increase product capabilities.

The new line is production- ready, and two other lines were moved to the new plant with more on the way.

It took eight trucks to bring in the new $2.5 million line.

Altogether, Hynes has invested $6 million to $7 million in renovations at the new plant, not including the cost of equipment. The new location gives the company 25 percent more floor space and sits on 33 acres for the company to consider growth.

Kalea Hall, staff writer, also contributed to this story.