New-York tribune., 1920-12-05
Steel Industry
Striving to Cut
ProductionCost
Elimination of Overtime
Pay Effects Big Saving:
Efficiency Increased by
the Reduction of Forces
To Retain Basic Scale
PIG Iron Production Lowest
ia Years as the Result
of CurtaiIed Operations
spectoI Dtspctch 70 The q~oxss

PITTS BURGH, Nov. 9.-A campaign
: OF "gnawing" directed against the high
costs of production is now going on
in the steel industry. 50 far 1t is
making inroads chiefly on the labor
item Of costs. Il Is expected next to
affect fuels, and may eventually reach
out and take whack at the present
high freight rates on raw Materials
The movement started when the lead
ing independent interest last week ad
mltted the hopelessuess Of trying to
hang on to the high selling prices, and
dropped to the Industrial Boards level
on all commodities excepting steel pipe.
Most OF the other Independents hav-
ing followed suit the immediate ques-
ton which corfronts all Of them is
how TO get costs down somewhere near
the same level as selling prices.
Labor in the steel industry 10 en-
ployed on two general bases, the day
wage basis and the tonnage output
labor. In the tonnage class is all
common labor and most semi-shilled
labor. nj the tonnage class is all
skilled labor, such as rollers, heaters,
puddlers, roughers, fnishers, catchers,
etc. The drafting room forces. while
generally considered in the salar ed
earning class when it comes to the
question Of cutting down costs.
Movo to Reduce Costs
The effort to reduce costa without
reducing the rate Of wages aud TO
postpone general reduction IN rate
until the cost Of living goes down
commenced in Youngstown and is
s"readiNg throughout the industry.
The first move was to cut off the over
time OF day labor The effect of this
was to give each man eight hours of
actual employment day, instead of
ten or twelve hours on the basic eight
hour day, which meant eleven hours
pay for TIE ten-hour man aud four
teen hours pay for the twelve hour
man. Cutting to eight hours work
N these two classes results in an ac-
tual reduction of 27 per cent to the
ten-hour men and AZ per cent to the
twelve hour men. without changing the
rat" of their pay Labor was put on
three shifts Of eight hours each in
stead of TWO shifts Of twelve hours
each. This cuts off all overtime ex-
pense and effects a considerable reduc-
ton in the pay roll
Among the tonnage men the sliding
scale Of pay based on the selling price
OF steel commodities takes care of all
workers in the sheet and tin mills.
How Costs Arc Being Cut
Adjustments of rates Of wages In
those mills in which the Amalgamated
Association OF Iron, Steel and Tinwork-
crs ls In control takes place monthly
The next adjustment will reduce wages
to the scale of the new selling prices.
1t has been the custom of the larger
non-union mills to follow the Amalga-
mated scale
In the steel mills the labor cost
among skilled workers in being re-
duced by dropping the inefficient men.
The ratio Of reduction Of force is said
TO be on the general proposition that in
'he rolling mills nine men can now do
the work Of ten, and in the blast fur
naces four men can do the work of five.
The effect of this wedding out process
IS SAID not to affect production in the
east and TO have already resulted in
bringing the efficiency of she working
forces up to something like the war.
time standard A proportionate reduc-
uon among craftsmen and tracers is
taklng place in many of the smaller
plants
1t IS freely predicted in the Industry
mat If the various plans for reducing
'abor costs do not work out satjsfac-
torily general reduction in the rate
Of wages paid viii follow MANY Of the
smaller mills are reported to be hard
mt by the new selling conditions md
none OF the larger independents expect
10 make any notable profits with the
present spread between costs and selling
prices The prediction made in these
columns that prices would not 20 ,o~s~ C"GS~
IMAM the Industrial Boards schedule
seems to be borne out by these facts.
Revival In Trade Expected
After a few months OF quetness and
low production the general expectation
s that there will be revival of buv-
ing IN the steel business which will send
prices up again and that this time the
United States Steel Corporation viii
loliow the upward movement. Il il
wen known that the corporation has
oeen IN favorable situation through
out this period because of the EARNINGS
brought into its Golfers by varions ~.
terprlses which are not steelmakinp in
character, such as the sale Of coke bv
proou the revenues from It's rail
roads. steamship lines, m!nes, cement
n'Ils, etc. That .his condition canno-
last forever is the assumption on which
local manufacturers base their predic-
uons that the next turn of the stee,
market will be upward in corporation
mli. as well as Independents
AT present the Carnegie Steel Com.
Pany Is operating around 50 oe; con,
with heavy untitled tonnage on is
books and q few cancclations Tho
average among the independents ysries
iron so TO 70 per cent, with few order.
booked. but considerable new business
coming in.
Some writer's have assumed that tho
customers Of the independents who had
TO pay the high premiums OF the last
year would be dissatisfied and take
their business TO the Corporation. This
view Is held to be erroneous because
those customers have received their
steel, used il, sold the product and taken
the profits whereas many customers If
the Corporation still are waiting for
deliveries, owing TO the enormous un-
filled tonnage.
Pig iron Production Low
The iron ard steel market in tbe Ma
honlng Valley is in a complete state Of
liquidation, with the exception of tubY-
lar departments which continue 10
hold their own in face Of sharply de-
Ginning market.
With only five OF fourteen blast fur
naces in the Sharon district operating. /
pig iron production is the lowest it has
been In several years. The output vas
further curtailed Wednesday, when two
more smelters blew ont