The Waterbury Democrat., 1945-03-07

Vt V " o V ttdttN Corporation facility, operated by U $. Steel Corporation. It was built nt cost Of 2O4 million dollars. It iS probably the most modern steel plant in the world today, a beauti- full engineering job, the answer to a Steelman'S dream.
 The other element in the picture is the Kaiser Company's Fontana plant in the Los Angeles area, IL is privately owned and privately op- erated, though 1t was built by Kaiser on money borrowed from the governmen ent's Reconstruction Finance Corporation. Total of the REC loans for construction and op- eration iS Ills million dollars. Kaiser has paid back in cash some five million dollars plus two-and-a-half million dollars the Kaiser Company would like to have set aside as a post-war reserve for reconvcrsion, which REC has not allowed.
 70 MILLIONS PLEDGED
 Tn addition, Kaiser has earmark- ed the earnings of some of his ship building operations in the west to further retire this debt to the gov ernment. There Is now pledged for this repayment some 80 million dol lars. Shipbuilding may not continue long enough to wipe out the govern ment loan, but additional profits from ship repair operations will be credited to the account so that 1t will be materially reduced, the exact amount depending on the length of the war.
 The Kaiser management est imates that on war business alone, some GO million dollars may be available to pay back REC, SO that at the end of the war the govern ment will have an interest in Fon- tana of something over 70 million dollars.
 Both Fontana and Geneva have been entirely on war work, produc- Ing the ingots. plate, bars and billets needed for ships and munitions. Both mills were built for just this purpose. Before either can be any good for postwar purposes, addition al facilities Will have to be built to produce the sheets and shapes re- Quired by civilian manufacturing industries in the west. To make either mill suitable for pcace-time production will require additional Investments estimated at 40 million dollars.
 Making these additional invest ments will be up 10 Kaiser In the case of Fontana, mp to whoever &C., quires Geneva unless the govern ment decides 1t will have to make the further investments to have it's present investments or to pro- vide jobs for steelworkers now em- ployed in the two plants.
 The west very definitely wants a steel industry of its own which will be Independent of eastern domi- nance and will furthermore be able to sell steel at from SC to SIP a ton less. that being the pre-War differ ential between eastern and western prices. due to freight costs from the eastern steel mills.
 PRODUCTION EXPANDED
 Before the war, the western steel industry had capacity of 40.000 ingot tons year though the west bought 100000 ingot tons.
 Today Genega has a capacity of 200. 900 ingOt tons. Fontana 700. = 900 and the six steel companies which did business in the west be- fore the war have expanded their production to l.350.00O tons. The 0ronh tnt.I nf q oEn nm I,.ot .a,,e is nearly to meet all western marke. demands and the west could be made independent with relatively small additional facilities at Fon- tana and Geneva.
 To think that eastern steel com panles will let this expanding west ern market get away from them without fight Is. of course. silly
 U. s. Steel has shown some in- terest in acquiring Geneva for pri- vate operation after the war, and also Fontana. This latter move. however Is generally regarded Tn the industry as gesture to annoy Kaiser. Kaiser reacted by saying he might be interestd in acquiring Geneva.
 Before either plant is disposed Of the costs will have to be written down SO private operators can show q profit.
 The prevailing thought in govern ment being against monOp0lies and In favor of competition. strong argument will no doubt be made to encourage Kaiser to add facilities at Fontana. and tO sell Geneva to whoever else will buy preferably company not affiliated with east ern steel interests.