Ohio Steel Companies on Edge: Russian Plant Might Get Unfair Advantage, They Say

By Paul Wilson, The Columbus Dispatch, Ohio

Sep. 13–Ohio’s largest steel companies are worried that the state might offer unfair incentives to lure a Russian steel company to the state.

Magnitogorsk Iron & Steel Works, a Russian steel producer also known as MMK, told the Russian media last week that it wants to build a $1 billion plant in Scioto County that would employ 1,000 workers.

MMK officials are expected to meet with state leaders next week. Neither side has said what will be discussed, but projects of this size normally attract incentive packages from bidding states.

Some Ohio steel companies are worried that such a deal would give the Russian company a competitive advantage, members of the Ohio Steel Council said when the group met yesterday.

“We don’t simply want to trade 1,000 jobs in one end of the state for 1,000 jobs in the other,” said Alan McCoy, vice president of government and public relations for AK Steel, a West Chester company with operations in Coshocton, Mansfield, Middletown, Walbridge and Zanesville.

MMK hopes to supply steel to automakers. Ohio companies that also supply that industry worry they could lose business if MMK, armed with large incentives, ends up selling steel at lower prices.

Ohio has lost more than 10,000 steel jobs since 1997, although the remaining operations have stabilized, experts say.

McCoy and other industry officials asked that a task force, made up of steel council members and officials of the Strickland administration, be created to find ways to change incentive programs “to support retention of all Ohio steel jobs.”

The steel companies have some ideas about that but aren’t ready to disclose them yet, said Mike LaWell, a consultant for ArcelorMittal, a Dutch company that includes former troubled steelmakers Acme Metals, Bethlehem Steel, LTV Corp. and Weirton Steel.

The state will take industry leaders up on their offer to talk about incentives, said Steve Schoeny, director of the economic development division of the Ohio Department of Development.

“The concerns you have raised, those are things we try to weigh ourselves,” said Schoeny, who led yesterday’s meeting of the steel council in place of Lt. Gov. Lee Fisher, who is on a trade mission to Japan.

MMK’s plant would be one of the biggest industrial-development projects nationally in years.

The state isn’t saying much about its dealings with MMK, although officials disclosed last week that the company has not yet applied for environmental permits for the proposed plant site in Haverhill, about 100 miles south of Columbus.

paul.wilson@dispatch.com

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