U.S. Steel’s announcement that it now will not invest $1.5 billion to upgrade its Mon Valley Works certainly rocked the region.
Indeed, the loosely stated reason for the pullback is hard to square. In a clearly contradictory scenario, the steel giant says a plan that would have introduced greater steelmaking efficiencies and better environmental controls somehow conflicted with the company’s drive to be “carbon neutral” by 2050.
What’s worse, however, is that corporate wealthfare aficionados now are coming out of the woodwork like cockroaches to urge that millions of taxpayer subsidies be thrown at U.S. Steel to “save” the Mon Valley project.
Gee, has this been the steel behemoth’s strategy all along?
The Post-Gazette found a fella by the name of John Tumazos, a Wilkinsburg native whose father worked at U.S. Steel’s old Homestead Works.
Now a research consultant in New Jersey, Tumazos proffers that, post-scuttling, other states likely are working on subsidy packages ranging from $100 million to $400 million to lure U.S. Steel’s state-of-the-art steelmaking facility to their locales.
“If I were the governor of Pennsylvania, that is what I would do,” Tumazos told the P-G. “They should have been thinking about this before Friday happened. How many billion-dollar projects are there in the county or the state?”
Really? Since when should taxpayers pony up up to nearly a third of the cost of a steel giant’s capital program? Since when should taxpayers cover millions of dollars for U.S. Steel to meet carbon goals that it has set voluntarily?
The rational answers are quite clear: Never. And never.
This is the same U.S. Steel that posted adjusted net earnings in the first quarter of 2021 of $283 million, bouncing back from a net loss of $391 million in the same year-ago quarter on its way to a 2020 loss of $1.2 billion.
Allegheny County Chief Executive Rich Fitzgerald also appears to have jumped on the U.S. Steel subsidy bandwagon.
“I think there could be further discussion,” he told the P-G. “I would hope so. We are going to try.”
That’s stunningly daft, dotty and disordered, all rolled into one. Does not Greater Pittsburgh have more than enough economics object lessons to prove the gross errors of such subsidies?
If it is U.S. Steel’s design to mothball the Mon Valley Works project in an attempt to have taxpayers help cover capital costs that it alone should bear, shame on U.S. Steel.
And double shame on any elected official in Pennsylvania who falls for such a machination and shows such manifest disrespect for taxpayers and sound public policy.
Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).
