The Tapestry of Steel
Mills like ArcelorMittal Dofasco play a key role in city, provincial, national and international supply chains.
By Dr. Peter Warrian – Professor, University of Toronto.
Manufacturing matters. Steel is the material backbone for manufacturing. Different kinds of steel. Steels you never dreamed of. Steels that are as light as aluminum and as strong as diamonds.
of ParliamentVance Badawey (Niagara Centre), Minister of Seniors Filomena Tassi (HamiltonWest—Ancaster—Dundas) and Member of Parliament Bob Bratina (Hamilton East — Stoney Creek).
Because of efficiency, productivity and technology gains, not as many people work in the steel industry as they used to. But we continue to consume more steel than ever before and our use of steel continues to rise by about 1 per cent a year.
If you’re going to have a modern economy, the steel industry is one you want to have in it. It’s highly engineered, highly recycled, and it’s a major employer. For every job in a steel mill there are about four jobs outside. In another era, that may have been jobs like welders, but now more likely they are engineers, and computer programmers.
If you got in a spaceship, you could see from Southern Ontario through Michigan, down the Central U.S. and right into Mexico. That is what’s called automotive alley. It’s why 40 per cent of a Canadian car is actually American, 30 per cent of a Mexican car is made in the U.S., and 13 per cent of a Mexican car is from Canada. If you’re going to succeed in steelmaking, you want to be in automotive alley.
Eighty-five per cent of what’s in a car is not made by an auto company. It’s made in the supply chain with all the companies within Automotive Alley – instead of just the steel plant and the auto producer, you’ve got 85 per cent of the parts and the value added being done in the supply chain. Of that group, 80 per cent are small and medium size firms, that are all over the place. What starts as a coil at Dofasco in Hamilton could be across the border four or five times before it winds up in an engine part in Oshawa.
From 1990 until 2010, about 90 per cent of all steel research and design dollars went into automobile lightweight steels. The next largest customer then was the construction industry. Now you see these big beams, big buildings, condos, or office buildings going up, even bridges. The new steels are migrating to the construction supply chain. The steels are now so complex that steel companies want to be in communication with not just the steel fabricators, but even the architects, because there are different design choices they can make due to the sophistication of steels. You’ll see whole subdivisions that used to be made with wooden two by fours, are now steel frames for housing.
Right now, about 26 per cent of steel goes into automotive. Steel economists think that by 2030, as much steel will go into construction – large institutions, residential, and the structure around them.
You go from a city story of Hamilton, to a regional story about Ontario, and then you go to a continental story, and then you go to a global story. These are all part of the tapestry of steel.
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To learn more about the advanced manufacturing sector in Hamilton, please click here.
