Republic Iron and Steel Company Youngstown Works, Ohio

Date added: June 29, 2018 Categories: Ohio Industrial Steel Mill

The Republic Iron and Steel Company was established in 1899 through a consolidation of various rolling mills and blast furnace plants primarily in the central and southern states. Capitalized at over $55 million, the company was one of the largest organizations to emerge at the end of the 19th century. It included thirty-six bar-forged iron plants, five blast furnaces, and numerous mining concerns (Lake Superior ores, Connellsville coke, and Alabama coal). Many of the facilities, however, were outmoded, and Republic moved to acquire new facilities while consolidating existing facilities to maximize production efficiency (this often involved shifting machinery between plants). Of particular concern to Republic was the enhancement of its steelmaking capabilities to supply their finishing mills. In its first year, Republic actively sought additional mining properties and purchased open-hearth plants in Birmingham, Alabama, Minneapolis, Minnesota, and Youngstown, Ohio.

In the eight months between May, 1899 and the end of the year, Republic produced 525,951 tons of goods, including merchant bar iron and steel, foundry and mill pig iron, a large percentage of finished products such as nuts, bolts, washers, rivets, nails, railroad spikes, shafting, axles, and a variety of specialty items. By 1900, Republic was recording gross assets of over $17 million. Between 1899 and 1905, the general offices of Republic Iron and Steel were located in Chicago, after which they moved to Pittsburgh until 1911 when operations were centered in Youngstown, Ohio. In 1936, the headquarters would move again to Cleveland, marking a greater orientation toward the Great Lakes, and Republic's largest consumer, the automobile industry.

The first decade of Republic's existence centered around the modernization of existing facilities, the consolidation of holdings and the removal of antiquated plants and machinery to maximize the production of steel and more highly finished products. By 1912, Republic's production of ore increased 117 percent, coke increased 236 percent, pig iron increased 128 percent, steel ingot increased 195 percent and finished products increased 46 percent. Employment at this time fluctuated between a high of 24,574 and a low of 14,442. During World War I, Republic acquired the Bessemer Coal and Coke Company of Alabama (with its yearly production of 1.4 25 million tons of coke from 1656 beehive ovens), and the DeForest Sheet and Tinplate Company of Niles, Ohio. At a cost of $4 million, DeForest included twenty-eight sheet mills, two jobbing mills, five cold rolling mills, and a galvanizing plant.

Net profits for Republic rose from $2,422,510 in 1910, to $7,616,520 in 1920, with a peak in 1917 of $15,857,190. At the onset of the 1920s, however, an industry-wide economic slump resulted in a rapid drop in the price of steel before production costs could be adequately reduced. In 1921, Republic recorded its worst earnings in the company's history and operated at only twenty-five percent of capacity. Rising freight charges, furthermore, forced Republic to reduce costs by cutting wages for common labor by forty percent. Despite efforts to reduce costs, Republic also incurred significant expenditures in 1924-25 due to overhaul work on the Haselton blast furnace plant and Bessemer plant, and the construction of a new 100 ton capacity open hearth furnace at the Youngstown plant. Capacity was still only at sixty percent in 1925.

Under the direction of Cyrus Eaton, a Cleveland businessman who gained a majority control of Republic stock in 1927, the second half of the 1920s was a period of reorientation for Republic Steel, as the company moved toward greater diversification of its product base. In 1927-28, Republic acquired Trumbull Steel (Warren, OH), Trumbull-Cliffs Furnace Co., Steel and Tubes, Inc. (Cleveland and Toledo, OH; Brooklyn, NY; and Detroit, MI), and Union Drawn Steel Co. (Beaver Falls, PA). These companies expanded Republic's capacity to produce cold-drawn steel bars and tubular products. Republic also gained a fifty percent share of Frentz Moon Company of Butler, Pennsylvania, a producer of specialized pipe.

In 1929, Easton placed Tom M. Girdler, formerly of Jones and Laughlin, in charge of Republic's steel interests. Girdler, along with many associates he brought with him from Republic, began to formulate corporate reorganization plans. In April of 1930, Republic Iron and Steel merged with the Central Alloy Steel Corporation, the Bourne-Fuller Company, and the Donner Steel Company to form the Republic Steel Corporation.

The merger marked a significant change in Republic's position in the American iron and steel industry. Central Alloy, with its modern electric furnace plants, was the largest producer of alloy steel in America with the greatest capacity for stainless steel production. Bourne-Fuller was a specialty nuts and bolts manufacturer, and Donner Steel was a modern iron and steel operation with considerable lakefront property in Buffalo, New York. The Republic Steel Corporation had a total steelmaking capacity of five million tons, making it the third largest producer in the country behind United States Steel and Bethlehem Steel. At the time, Republic controlled 18.4 percent of the national capacity for strip steel, 16.6 percent of pipe, and 13 percent of bars and allied products. On the contrary, Republic had almost no capacity for heavy steel products such as structural, plate, or rails.

Despite the economic uncertainties of the Depression, the new corporation continued to add to its holdings by acquiring the Corrigan, McKinney Steel Company and the Truscon Steel Company in 1934. Corrigan, McKinney was a well balanced integrated steel company based in Cleveland, Ohio, while Truscon steel was the largest manufacturer of steel building products in the country. Truscon's capability to produce pressed steel provided Republic with an outlet for its steel products for the automotive and appliance industries. The acquisition of Truscon Steel, however, was challenged by the Department of Justice as a violation of the Sherman Anti-Trust Act (1890). Lawyers argued that the purchase of Truscon gave Republic an unfair advantage by reducing competition within the industry. Republic successfully fought off the charge and finally acquired Truscon in the Fall of 1935. In the year between 1934 and 1935, Republic's assets rose from $29.5 million to $62.3 million.

The 1930s marked a major turning point in the history of Republic Steel. Along with its incorporation and movements toward greater diversification, the company's production base shifted from the Valleys District toward the Great Lakes region with greater accessibility to the automotive industry. In 1936, $25 million in bonds were issued to construct a continuous strip mill in Cleveland. With an annual capacity of 840,000 tons, it was the largest facility of its kind in the world, capable of producing roll strip steel 92" wide. Also in 1936, the corporate headquarters were moved from Youngstown to Cleveland.

The increased demands on the American steel industry during the War years stretched the production capabilities of all companies. In the first half of the 1940s, Republic continued to expand its ironmaking and steelmaking capacity, particularly for alloy and stainless steels. In 1940, Republic recorded its highest levels of productivity and profit, with ingot production reaching over six million tons. Republic also received a $25 million issuance from the Defence Plant Corporation, a subsidiary of the Reconstruction Finance Corporation, for defence related industrial expansions. The money went to the construction of byproduct coke ovens, blast furnaces, electric furnaces, finishing mills, and the development of iron ore and coal mines. During the war years, Republic continued to achieve record numbers in many departments. Of particular interest. Republic became the largest U.S. producer of electric furnace steel in 1942. By the end of World War II, Republic had over $140 million in working capital.

During the immediate post-war years, Republic and other steel producers actively reconverted from war based production to consumer goods. Republic made a major move to double its capacity for stainless steel, and in 1945 acquired Stevens Metal Products Company (Niles, Ohio), a manufacturer of steel barrels and drums. In 1947, furthermore, Republic purchased the government owned steel plant in south Chicago for $35 million. While demand had fallen after the war, prospects for strong postwar consumer activity seemed promising for the American iron and steel industry. Of particular importance to Republic was the move into rural markets (for farm equipment), and specialty items for the television industry.

A general slowdown in the industry during the late 1940s resulted as consumer activity fell and labor disruptions increased. By the 1950s, however, production increased with demand for goods vital to the Korean War efforts. In this environment, Republic initiated the largest long-range project in its history-a complete overhaul of its Cleveland plant at a cost of $75 million. The focus of the project was the modernization and expansion of basic ironmaking and steelmaking facilities, which increased steel production by 670,000 tons a year. This movement was accentuated by the acquisition of greater raw material reserves and transportation networks between 1950 and 1954. In 1952, Republic also entered the market for the production of titanium steel and titanium alloys for consumer goods. Despite these efforts, Republic experienced a twenty percent decline in profits between 1956 and 1965. The company blamed the decrease on smaller mini-mills that paid lower wages and could therefore charge lower rates.

Through the end of the 1960s, Republic worked to further modernize, integrate and diversify its operations. The Great Lakes region continued to be its principle market, but the company also stepped up its efforts to capture a larger percentage of the foreign markets. The period also marked personnel changes for Republic, beginning with the retirement of Tom Girdler in 1956. Girdler was replaced by Charles M, White, who was later replaced by T.F. Patton in 1963, with W.B. Boyer taking over duties as president in 1968 (Patton still serving as CEO). In 1969, Republic Steel Corporation continued to be the third largest manufacturer of steel in the United States, producing almost eleven million tons.