Big Steel: The First Century of the United States Steel Corporation, 1901-2001 (review)

Big Steel: The First Century of the United States Steel Corporation, 1901-2001. By Kenneth Warren. Pittsburgh: University of Pittsburgh Press, 2001. Pp. xviii+405. $32.

For two decades or so, the question asked by historians of the American steel industry was: Who has the best angle on accessing the long-closed archives of U.S. Steel? For in these voluminous corporate papers were the necessary raw materials for a definitive history of steel in the American century. In recent years, Kenneth Warren gained access to and successfully mined the closely related riches of the Frick papers, first for his Triumphant Capitalism (1996), a business biography of Henry Clay Frick, and then for Wealth, Waste and Alienation (2001), an account of the Connellsville coal district.

Now Warren has cracked the mother lode itself. His Big Steel is based on three research visitations in the U.S. Steel archives, partly funded by the U.S. Steel group of USX Corporation, as well as twelve hours of interviews with company executives. The footnotes reveal that he has examined minutes of the powerful executive, finance, and corporate policy committees and drawn extensively on a two-hundred-volume consulting study from the 1930s. Readers will find his book invaluable as an account of the corporation's far-flung activities. Quantitative data on output, operating costs, market shares, and much else is presented in 122 tables.

Warren's central theme is the persistent tension between the massive economies that ought to have benefited the nation's first billion-dollar corporation in the scale-intensive steel industry and its rather prosaic history of repeatedly fumbling opportunities for innovation and growth. In each decade after its organization in 1901, U.S. Steel lost market share to smaller, more nimble domestic rivals—and then to foreign competitors. During the first half of the century it rejected or only slowly adopted such key product innovations as heavy structural shapes and electrically welded pipe (thereby missing out on the skyscraper and oil booms of the 1920s) as well as such central process technologies as electric furnaces and continuous hot-strip mills. The demanding market for automobile steels largely went elsewhere. After World War II, when American steelmakers bulked up on outmoded open-hearth furnaces, U.S. Steel was especially slow to adopt basic oxygen steelmaking and continuous casting. The industry's failing worldwide leadership was foretold as early as 1959, when steel imports first exceeded exports (imports now stand at around one-quarter of domestic consumption). In 1965, oxygen furnaces made 55 percent of Japan's steel but just 17 percent of America's. Five years later, in 1970, Nippon Steel displaced U.S. Steel as the world's largest steelmaker.

As Warren makes clear, U.S. Steel for its first three decades was more of a diversified holding company—with vast raw material and transportation holdings along with scattered steelmaking and processing facilities—than a tightly integrated operating concern. In the 1930s Myron Taylor, who took over the reins from the stability-minded Elbert Gary, pushed through a company-wide modernization. The separate Carnegie and Illinois steel divisions were merged into a single entity, operations and sales were moved to Pittsburgh (leaving only financial matters with the once powerful central offices at 71 Broadway in New York), and the new corporate structure was chartered in Delaware. Ironies abound. When commissioning the massive study in support of these changes, Taylor spoke approvingly of being "a little old-fashioned" and ventured that "some of the modern ways are not ways that this group would care to follow" (p. 151).

U.S. Steel's leadership in subsequent decades was preoccupied with a second theme to which Warren gives prominence, analyzing and trying to maximize location advantages. For most of its history U.S. Steel had three great centers of steelmaking: Chicago, including its state-of-the-art Gary works; the...