How Just 14 People Make 500,000 Tons of Steel a Year in Austria (US)

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The Austrian village of Donawitz has been an iron-smelting center since the 1400s, when ore was dug from mines carved out of the snow-capped peaks nearby. Over the centuries, Donawitz developed into the Hapsburg Empire’s steel-production hub, and by the early 1900s it was home to Europe’s largest mill. With the opening of Voestalpine AG’s new rolling mill this year, the industry appears secure. What’s less certain are the jobs. The plant, a two-hour drive southwest of Vienna, will need just 14 employees to make 500,000 tons of robust steel wire a year—vs. as many as 1,000 in a mill with similar capacity built in the 1960s. Inside the facility, red-hot metal snakes its way  along a 700-meter (2,297-foot) production line. Yet the floors are spotless, the only noise is a gentle hum that wouldn’t overwhelm a quiet conversation, and most of the time the place is deserted except for three technicians who sit high above the line, monitoring output on a bank of flatscreens. “We have to forget steel as a core employer,” says Wolfgang Eder, Voestalpine’s chief executive officer for the past 13 years. “In the long run we will lose most of the classic blue-collar workers, people doing the hot and dirty jobs in coking plants or around the blast furnaces. This will all be automated.”

Voestalpine long ago decided it couldn’t compete on bulk steel with titans such as Luxembourg-based ArcelorMittal, Japan’s Nippon Steel, or South Korea’s Posco, let alone hundreds of low-cost Chinese furnaces. Management instead went for high-value niche products such as the wire made in Donawitz, which have kept Voestalpine profitable. But the shift has had a big effect on the number and kinds of jobs the company creates: An increasing share of workers are white-collar technicians—like the trio of controllers in Donawitz—rather than the coal shovelers of yore.

The change comes as steel’s political significance is rising. France and the U.K. have considered nationalizing plants to stop closures, while Donald Trump has focused on steel as a symbol of U.S. industrial might and a source of well-paying blue-collar jobs. People in the industry say that’s a simplistic view. Steel “will create employment, but it will not be creating the numbers that many governments hope for,” says Edwin Basson, director general of the World Steel Association. “There’s a long way to go for this message to be adopted everywhere. We are fighting against historical experience and perception.”

Over the past 20 years, the number of worker-hours needed to make a ton of steel industrywide has fallen from 700 to 250, as new control processes and innovations such as casting steel closer to the shape of the finished product have improved productivity, according to the World Steel Association. From 2008 through 2015, Europe’s steel workforce shrank by almost 84,000 jobs—about 20 percent—to 320,000. Voestalpine’s Eder predicts employment in the sector could decline another 20 percent over the coming decade. “The industry will need less and less unskilled workers,” he says in his office at Voestalpine’s Linz headquarters, 110 miles north of Donawitz.

The Donawitz mill, in a narrow valley flanked by lush green pastures filled with dairy cows, stands in stark contrast to the medieval churches and castles clinging to the rocky cliffs nearby. Alongside a small creek on the valley floor, the €100 million ($111 million) plant turns 3-ton beams of steel forged in Voestalpine’s blast furnaces next door into thick wire used to make components such as shock absorbers and piston cases in BMW, Mercedes-Benz, and Audi factories across the border in Germany. While about 300 other workers in Donawitz carry out support roles such as shipping logistics and running the internal rail system, the rolling mill itself will be operated by just over a dozen people.

The three technicians sitting in what’s called the “pulpit”—a structure like a ship’s bridge high above the plant floor—mostly play a monitoring role, watching for warning signs such as spikes in temperature or pressure. The former line workers spent three months training for their new jobs, studying control systems and working in a simulated pulpit learning how to interpret the data. The other employees maintain equipment or retool the plant for various wire gauges—hundreds of variations ranging from 4.5 millimeters to 60 millimeters.

Within three years, the company aims to open a fully automated plant in Kapfenberg, a half-hour’s drive down the valley from Donawitz, that will supply high-tech airplane components such as stress-resistant engine mounts and landing gear parts. Although the details are still uncertain, automating the plant—which currently employs 2,500 people—could dramatically change the jobs picture. Over the following decade, Voestalpine plans to modernize its blast furnaces, the massive tubs filled with molten metal that produce the bulk steel that gets processed at mills like Donawitz. The work there is dirty and labor-intensive, with a total of 2,700 employees at the company’s five furnaces, in Donawitz and Linz. Voestalpine says much of that process can be automated, providing a safer and cleaner environment for employees even as the number of jobs will likely fall. “What does steel production of the future look like?” Eder says. “The positive thing is, the jobs surviving in the long run will be really attractive.”

BOTTOM LINE – At Voestalpine’s new Donawitz wire mill, advances in technology mean fewer steelmaking jobs even as politicians point to the sector as a symbol of industrial might.
Source :
https://www.bloomberg.com/news/articles/2017-06-21/how-just-14-people-make-500-000-tons-of-steel-a-year-in-austria

Photo :  The “pulpit” at Donawitz, where just three employees control the plant.  PHOTOGRAPHER: LISI NIESNER/BLOOMBERG

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