Evening star. [volume] (Washington, D.C.) 1854-1972, 1956-07-08
BY DAVID KOONCE


$4,000 United SteelworkerS could
continue for another two weeks
without severe effects on the eco
nomy as whole, according to the
view Of economic observers here.
Then the pinch would begin.
Although isolated areas of in
dustry were hit almost Immediately
by the shutdown. sizeable inven-
tory of steel products, estimated
variouSly at from 10 million tons to
20 million tons, provided a cushion
to soften the initial impacts.
Among the first to feel the pinch
were the railroads. On the second
day Of the strike, Pennsylvania
Railroad, largest volume carrier in
the country, announced that it was
furloughing $4,000 of its 10000
employees. This was followed by
similar announcements from the
Baltimore g. Ohio, New York Cen
trail and others. BY the end of the
week, about 10000 railroad workers
were staying home.
Railroad carloadings, one Of sew
eral bellwethers. will begin to show
the effects of the strike this week.
Also hit hard the first week of the
steel strike were trucking firms and
the ore carriers on the Great Lakes.
Many steel users began building
inventories several months before
the expiration of the unions con-
tract at midnight June 30. but in
some fields, inventories just do not
exist One of these is the heavy
construction industry, which COB
bles up steel as fast as the COM
panieS can produce it. Because
structural steel is tailormade, in
ventory-building is virtually i'm
possible.
Construction to Be Hit
Heavy construction projects have
just begun to feel the effects Of
the production cutoff, and in three
weeks. if steel production is not
resumed. such building will virtu-
ally come to a standstill. When
building is stopped, it isn't just the
men who work on the steel beams
of the superstructure who are idled,
of course. Plumbers, bricklayers,
steamfltters. carpenters, tilesetters,
plaStererS and roofers also are
thrown out of work. Also the $34
billion Federal highway program,
which Congress hoped to see started
Immediately, would be delayed by
strike lasting longer than three
weeks. Forty thousand coal miners,
mainly in pits feeding the steel
industry, face layoffs. probably
this week.
Another group suffering early will
be the oil drillers, especially those
who probe the undersea tidelands.
Like structural steel, their equip
ment requires special ordering.
Soon afterward, the pinch will be
felt, and strongly. by manufacturers
of railroad cars and other rail
equipment. who use up about 5Ia
per cent of the Nations total steel
production.
Next to be hit will be the smaller
metal processing companies, the
manufacturers Of small gadgets,
many of whom could not afford to
build inventories. After a month,
appliance makers will be hard put
to keep up their production sched-
ules.
In eight weeks, the situation with
container manufacturers, makers of
cans for everything from cylinder
oil TO salmon. will be desperate.
They have been taking about one
tenth of the steel produced
Unusual Auto Situation
The auto industry is in an I'M
usual situation. In the past, when
steelworkers walked out, auto man.
ufacturers, steelS best customer,
have successfully applied pressure
for settlement before shortages
developed that would slow auto
production. But the picture is diff
ferent this year With auto output
down as much as % per cent. De-
troit has enough steel on hand to
complete its production schedule of
1856 models. and. in some plants,
to begin turning out next years
cars.
All in all, shutdown as lengthy
as the eight-week strike in 1852
would cost the economy at least SIS
billion in wages and sales, accord
ing to estimates of the National
Association of Manufacturers.
Much of the inventory building
has been done by warehousemen
and speculators-the only groups
who stand to gain anything from a