When U.S. Senator Sherrod Brown visited McDonald Steel on Wednesday, November 10th, to tout the benefits of the recently enacted Bipartisan Infrastructure Plan he was greeted by company officials who said they are both eager and able to meet increased demand for specialty steel shapes that will be driven by the hundreds of billions of dollars the legislation dedicates to road, bridge, and rail construction.
“This plan makes a huge investment in the future of steel production right here in the Mahoning Valley,” Sen. Brown said after touring McDonald’s 14” hot roll mill. “We fought to make sure this bill has the strongest Buy America rules ever passed. That’s going to mean more work for steel made in America, more work for McDonald Steel, and job creation up and down the supply chain.”
Company President Jim Grasso’s reaction was emphatic and succinct: Bring it on because here at McDonald we do infrastructure.
“Today, more than a century after this mill opened, McDonald Steel is in an incredibly strong position to thrive in the 21st Century thanks to the massive and long-overdue investment in the nation’s infrastructure championed by Senator Brown,” Grasso said. “The $110 billion in funding for roads, including $40 billion for bridge repair and construction, along with the $66 billion for railroads will create increased demand for the specialty shapes we produce—demand we are ready and more than able to meet.”
Mike Havalo, Vice President of Sales and Marketing, noted that McDonald Steel is already recognized as one of the nation’s leading manufacturers of bridge expansion joints, bridge grid decking, railroad joint bars, railroad track brake shoes, railroad D-bars, as well as railroad car brake beams.
“Our steel grid deck was used on the Peace Bridge which connects Buffalo, NY, and Canada and we are now suppling components to the companies working on the Ambassador Bridge in the Detroit area,” Havalo said. “We’ve become a major player in the bridge sector because contractors know they can depend on McDonald to deliver the high-quality shapes they need on time and on budget order after order, project after project, day after day. We are confident our reputation not just meeting, but exceeding customer expectations will make us a ‘go-to’ supplier when bridge construction begins across the United States.”
McDonald’s ability to roll more than 500 asymmetrical and symmetrical hot rolled steel shapes and custom design capability will enable the company to compete for and secure business in the other industries that will be impacted by infrastructure plan. “From material handling to auto and truck making, to water transmission, to construction, if a company needs a hot-rolled specialty shape, we can produce it,” he said. “That is why we are very excited about the future.
Grasso said that along with its commitment to quality, customer service, and extensive product line, McDonald possesses one more advantage that places the company in an extremely strong position to capitalize on the vastly increased infrastructure spending: reliable sources of domestic steel that will enable the firm to comply with the bipartisan plan’s strong “Buy USA” provisions.
“The solid relationships we have forged with domestic steelmakers have enabled us to weather the supply chain challenges that have impacted our competitors,” he commented. “Now those relationships will have the added benefit of giving us a head start when demand for steel increases rapidly in the months ahead. We are already receiving inquires from customers and potential customers in anticipation of the money flowing into the economy. We are committed to turning those inquiries into orders that will fuel growth at McDonald well into the future.”
Although American steel has been on the decline over the last few decades, its reputation remains strong. Companies know they can rely on it, and in the wake of the pandemic and the associated supply chain challenges—not to mention the reshoring trend that started years ago and has accelerated during the pandemic—the American steel industry is poised to make a comeback.
During the pandemic and in the aftermath of the ship stuck in the Suez Canal, companies who had long relied on cheap foreign steel found themselves in trouble. They faced delays and rising costs, including high tariffs on imported steel. Due to nation’s heavy reliance on cheaper foreign steel imports up until now, prices and availability of domestic steel have become more competitive. As more U.S. companies shift to a steel supplier closer to home, we should see positive growth in domestic manufacturing of quality steel, and as a result, American jobs.
A shorter supply chain is always a benefit, and American steel is no exception. When companies can source supplies and raw materials close to home, they reduce transportation costs and the risk of delay. They also have the opportunity to keep a closer eye on the process to ensure quality control.
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Advantages of Buying American Steel
Reduced transportation costs and better availability aren’t the only reasons to buy American steel. Why buy American? No matter the industry, it’s an opportunity to boost the national economy, support local communities, and take advantage of a skilled workforce. For steel in particular, there are further implications:
Safety and Quality
American steel is simply better. The quality standards in this country surpass those in many other countries, and steel must undergo a variety of safety tests before it can be used for construction or manufacturing projects. When you buy American steel, you can trust the integrity of the product.
Reporting from 2008 indicated that Chinese steel had a 60% failure rate in one series of tests and could pose a safety hazard for construction projects. This was largely due to the addition of chromium and boron, which were added to the steel to create an alloy that qualified for tax rebates. Some companies may have saved some money in that process, but it was at the cost of compromised steel.
U.S. companies are bound by U.S. environmental regulations, ensuring a measure of ecological responsibility that cannot be guaranteed with an overseas facility. American steel companies are also driven by consumer demand to look for other ways to lower emissions and enhance sustainability. U.S. steel also regularly uses scrap to manufacture steel, which not only reduces waste—it also produces less CO2 than iron ore production.
American steel has a long, rich history, and the integrity and reliability that was established years ago still remains. By replacing foreign steel with American steel, companies have the opportunity to bolster the U.S. economy, support their local communities, shorten their supply chains, improve quality control, decrease their environmental impact, and create higher-quality products for the end user. It’s a win-win situation that benefits businesses and consumers alike.
Working with McDonald Steel
McDonald Steel Corporation is a proud U.S. steel manufacturer based in McDonald, Ohio. We’ve grown from humble beginnings in 1981 into the country’s leading provider of highly engineered hot rolled steel special shapes for a variety of industries, including railroad, automotive, infrastructure, agriculture, construction, and more. Our commitment to innovation and community drives us to serve our employees and our customers with respect, integrity, and the high-quality products you expect and deserve.
Contact us to learn more about our facilities and capabilities, or to inquire about the benefits of using American steel.
On April 18, 2017, the President signed the Executive Order on Buy American and Hire American. This presidential directive clearly delineates a new policy to maximize, through its inclusion in Federal financial assistance awards and Federal procurements, the use of goods, products and materials produced in the United States. In specific reference to steel products, the Executive Order defines “Produced in the United States” as meaning all steel manufacturing processes, from the initial melting stage through the application of coatings, must occur in the U.S.
The decree actively encourages participation of American workers in the manufacture of materials destined for the redevelopment and maintenance of our country’s infrastructure. Our customers who participate in federally-assisted infrastructure projects, such as bridges, railroads and utility pipelines, can rely on McDonald Steel Corporation to be in full compliance with the Executive Order.
America’s steel industry has long been a stimulus for our country’s economic engine. Today, the President is asking steel customers to utilize American-made products that will generate new domestic growth. Toward this end, McDonald Steel can further assist in bringing your complete stocking inventory into compliance with the Buy American and Hire American Executive Order.
On behalf of the employees of McDonald Steel Corporation, I look forward to working with our customers to assist in rebuilding our country’s infrastructure with American-made steel produced by American steelworkers.
A. Timothy Egnot President/COO – McDonald Steel Corporation
YOUNGSTOWN, Ohio — Two steel companies – McDonald Steel Corp. and Hynes Industries – have found success in rehabilitating older manufacturing complexes to sustain strong market demand for their products.
McDonald Steel Corp. first realized the potential of U.S. Steel Corp.’s former McDonald Works shortly after the steel giant shuttered operations there in 1980. And, just recently, Hynes Industries Inc. finished remodeling and moving its production operations to the former Wean United plant on Henricks Road in Austintown.
“Their business plan was solid,” Tim Egnot, president of McDonald Steel, says of the founding partners of his company. “They knew what they were doing.”
McDonald Steel was created following retrenchment of the steel industry in the Mahoning Valley that began in the late 1970s. As U.S. Steel wound down its production, David Houck put together a business plan, recruited a top management team and raised the capital needed to create what today is one of just a handful of mills in the world that manufacture nonsymmetrical shapes. The mill started operations in 1981.
“We’ve really grown the business,” Egnot says, noting how the company has adapted to the changing nature of manufacturing. “We’ve persevered through the ups and downs.”
Over the last several years, for example, McDonald Steel has embraced and executed the principles of Lean manufacturing, Egnot says. “In the past, everyone was buying large volumes. Now, no one wants to carry inventory.” Lean concepts are used to make manufacturing processes more efficient without sacrificing quality, and to ensure a quicker turnaround to meet the demands of just-in-time inventory.
McDonald Steel employs 105 and ships its products around the world. Critical to its success are a diversified customer base and ability to produce specialized products that few mills in the world can manufacture, Egnot says. “We’ve been in a growth pattern over the last couple of years and able to grow through the downturn of 2008 and 2009,” he adds.
McDonald Steel manufactures nonsymmetrical steel shapes used in products such as truck rims for over-the-road transportation, hinges for the automotive industry, components for the railroad market, concrete water pipe couplings, off-road wheel rims and decking for highway bridges.
“We’ve tried to diversify as much as we can,” Egnot says, and not be tied into or dependent upon a single market. The off-road market, for example, is weak while the automotive, rail and water construction sectors are performing well. “Our backlog looks good,” he reports. “We continue to see increases in business volume from a tonnage standpoint.”
Across the Mahoning Valley in Austintown, Hynes Industries is relocating its operations to the former Wean United building on Henricks Road, vacating its operations on Oakwood Avenue.
Last summer, Resilience Capital, based in Cleveland, assumed majority control of the company, says Mike Giambattista, senior vice president – roll-formed sales and marketing. “We’re looking forward to growing the company and expand our business possibly through location and acquisition. It’s going to be an exciting period.”
This year the company will also undergo changes in management, Giambattista says, as Hynes welcomes a new president and CEO, Greg Gyllstrom. Gyllstrom succeeds Jim Blair, who is retiring.
Hynes’ most ambitious project, however, is the consolidation of five manufacturing operations into one location, Giambattista says. “Everything will be moved over to Henricks Road, a facility that has 291,000 square feet of manufacturing space,” he says. The plant served as the headquarters and manufacturing plant for Wean United and most recently was occupied by Main Steel.
“Having everything under one roof is going to bring some efficiencies that we didn’t have before,” says Pat Montana, senior vice president – sales and marketing of Hynes’ strip steel, flat wire and FlexAngle divisions. Previously, Hynes had operated production plants along Four Mile Run Road, Industrial Road and leased space on McDonald Steel property.
“It will cut down freight costs,” Montana says. “We’re transferring a lot of material. So once it’s produced, we could just send it over to the next bay instead of the next plant.”
He estimates the expansion should result in Hynes increasing its production workforce by 10%. The company employs 160 in the Mahoning Valley.
All of the production work is operating from the new site, Giambattista says, and the company’s offices should be finished within several weeks.
The expansion includes a $2.5 million investment in a new roll-form line. Hynes specializes in manufacturing flat wire, roll-formed shapes, slotted angle, and strip steel products that serve the truck/trailer, appliance, outdoor furniture, hardware, storage, and solar energy markets.
“In all of our product groups, we anticipate growing about 15% this year,” Giambattista says. Hynes operates 50 production lines and stocks 38 million pounds of steel it buys from producing steel mills. “We slit our own steel and process it, streamlining the supply chain,” he says.
The new location was retrofitted with new lighting and the interior is freshly painted in bright colors. “I’d say the investment is approaching $4 million,” he says.
Hynes’ new plant adds another 50,000 square feet of manufacturing capacity. “To have a blank sheet of paper that you can design and place the equipment where you need it, Giambattista says, “and to maximize efficiencies, was a real luxury for our team.”
Pictured: McDonald Steel Corp.’s plant in McDonald.
Copyright 2016 The Business Journal, Youngstown, Ohio.