This is largely true, but it doesn't have to be true. The cost of running a steel company could be (dramatically) simplified to the following:
1. Cost of materials, +
2. Cost of labor, +
3. Cost of shipping to the customer.
On factor #1, China and the US are essentially tied. We've got iron ore, and they've got iron ore. On factor #2, China has the US beat hollow. On factor #3, the US has China beat hollow (assuming domestic or nearby consumption).
Solution: diminish the extent to which factor #2 is important by using new processes which aren't labor-intensive. You might end up with a steel foundry which had 45 employees instead of 1,200, but you'd also end up with an American company which could produce steel price-competitively with China.
(The successful American mini-mills are competing on both #1 and #2. They use small amounts of labor, and they generally recycle scrap steel instead of using new ore - a cheaper input. Why don't you ever heard about the mini-mills? Because the steel unions hate them and want to pretend that the rusting hulks of Pennsylvania are the entire steel industry.)
Most excellent analysis! I guess most of it boils down to getting rid of the bloody labor unions.
I'd like to know why we aren't subsidizing more of these "mini-mills" to produce this armor - you know, I'd like to take that money from the National Endowment for the Arts and spend it on armor instead.
I think it would be a fair trade to give a mini-mill the seed capital to produce armor instead of giving to leftist performance artists...
Most steel in Pennsylvania is produced in union shop electric-arc furnace "mini-mills". The largest are at AK Steel-Butler, ISG-Coatesville, ISG-Steelton, Allegheny Ludlum-Natrona, Allegheny Ludlum-Brackenridge, and Allegheny Ludlum-Midland. The Unions don't "hate" mini-mills. They work at them. Lets not drag union bashing in where it is not needed.
There's no need for an anti-union diatribe here.