But minimills are not necessarily specialty steel producers. They began with low-end steel and remained that way until the 1980s when automotive sheets were attempted with new technologies. They succeeded up to a point but the fixed costs per ton in a minimill was so low that the big producers with their obsolete and/or retrofitted technologies could not simply compete. Minimills are amenable to specialty steels because of small volumes, although even gigantic firms with plant capacities over 11 million tons can and do produce specialty steels (a chemical process extra to the process of good basic steel).
Cheers, Anthony xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Anthony P. D'Costa, Associate Professor Comparative International Development University of Washington Campus Box 358436 1900 Commerce Street Tacoma, WA 98402, USA Phone: (253) 692-4462 Fax : (253) 692-5718 xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx On Mon, 28 Jan 2002, Ian Murray wrote: > > ----- Original Message ----- > From: "Devine, James" <[EMAIL PROTECTED]> > To: <[EMAIL PROTECTED]> > Sent: Monday, January 28, 2002 9:38 AM > Subject: [PEN-L:22002] RE: Re: the profit rate & recession > > > Michael Perelman writes: > Thank you, Rakesh. I have repeated a > similar > theme in almost all of my writings -- but with a little bit > different twist. > Low profits suggests heightened competition, which calls for more > intensive > investment. This investment goes unnoticed in the macroeconomic > data > because of the manner in which investments is reported.< > > Duménil and Lévy argue that a low profit rate encourages > capitalists to > respond in a more extreme way to economic shocks. That makes sense > to me. > > > While gross investment may be higher during a boom, when profits > are low > > companies intensively invest in improving their old capital > stock. > > Most or all of what's described below is "disinvestment," purging > the oldest > or most obsolete capital equipment. Unlike net investment, it > doesn't create > aggregate demand or help realize profits. It does have a beneficial > supply-side effect for the capitalists. Part of the reason for the > partial > recovery of profitability in the United States from the 1980s to > the 1990s > was the shake-out of the 1980s, which involved disinvestment: very > old steel > mills, for example, were shut down, helping to create the "rust > belt." This > set the stage for investment in more up-to-date mini-mills > producing > specialty steel and for the shift of the old-fashioned steel > industry to > places outside of the U.S. > > ============== > Was it uncompetitive capital-labor ratio costs or the overvalued > dollar or both that transformed the US steel industry? > > Ian > >
