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OM in the News: 500,000 Tons of Steel. 14 Jobs

June 30, 2017

The “pulpit” at Donawitz, where just 3 employees control the plant.

The Austrian village of Donawitz has been an iron-smelting center since the 1400s. With the opening of Voestalpine AG’s new rolling mill this year, the industry appears secure. “What’s less certain are the jobs,” writes Businessweek (June 26, 2017). The plant needs just 14 employees to make 500,000 tons of steel wire a year—vs. as many one thousand in a mill with similar capacity built in the 1960s.

Inside the facility, red-hot metal snakes its way along a 2,300-foot production line. Yet the floors are spotless, the only noise is a gentle hum, and most of the time the place is deserted except for 3 technicians who sit high above the line, monitoring output on a bank of flatscreens. “In the long run we will lose most of the classic blue-collar workers, people doing the hot and dirty jobs in coking plants or around the blast furnaces. This will all be automated,” says Voestalpine’s CEO.

Over the past 20 years, the number of worker-hours needed to make a ton of steel industrywide has fallen from 700 to 250, as new control processes and innovations (such as casting steel closer to the shape of the finished product) have improved productivity. From 2008 through 2015, Europe’s steel workforce shrank by almost 84,000 jobs—about 20%, and experts predict employment in the sector will decline another 20% over the coming decade.

While about 300 other workers in Donawitz carry out support roles such as shipping logistics and running the internal rail system, the mill itself is operated by 14 people. The technicians sitting in what’s called the “pulpit”—a structure like a ship’s bridge high above the plant floor—mostly watch for warning signs such as spikes in temperature or pressure.

Classroom discussion questions:

  1. What other industries are seeing a similar job compression?
  2. What skills do the new steel plant workers need?
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