Cliffs CEO, Mrvan tout American supply chains: 'Companies that have exporting jobs are suffering'

EAST CHICAGO — The steel industry remains the engine that drives the Northwest Indiana economy and must be preserved, U.S. Rep. Frank Mrvan, D-Highland, told steelworkers at North America's largest steelmaking complex in Indiana Harbor.

Mrvan and Cleveland-Cliffs Chairman, President and CEO Lourenco Goncalves toured the Indiana Harbor Works steel mill in East Chicago on Monday. More than 3,600 steelworkers work at the massive mill on the Lake Michigan lakefront that produces metal for cars, appliances and countless other products.

They touted the importance of shortening supply chains with American-made goods after the coronavirus pandemic resulted in worldwide shortages that continue to ripple throughout the economy, leading to higher prices, half-empty car dealership lots and difficulty obtaining some consumer goods like bicycles.

"As co-chair of the Steel Caucus, it's my mission every single day to ensure that we are providing an environment for us to thrive," Mrvan said. "Your philosophy of being No. 1 in the world in producing steel and having great pride in the American worker and American steel is something that transcends throughout our Region and throughout our nation."

Protecting the domestic steel industry is a matter of national security, Mrvan told the assembled United Steelworkers union members. Congress needs to preserve tariffs, he said.

"What we have learned during the pandemic and the conflict that is going on in Ukraine is how important it is to be self-sufficient in producing our steel, how important it is that we're investing in this industry and that we're investing in the American steelworker and all the contractors that are providing the support necessary to be the top-producing steel region in the world," he said. "When we talk about the pig iron and we talk about being environmentally friendly, the one message I want to make to clear is what Cleveland-Cliffs is doing for this Region is that it's providing for families. It's providing for families to be able to put food on the table and have college educations."

The recently passed infrastructure bill and its Buy American provisions will mean more job security for steelworkers in the Calumet Region, Mrvan said. 

"We're investing in our roads and our bridges and our waterways," he said. "When families are traveling across a bridge and it's safe, that's a sense of pride but also a sense of economic retention that our steelworkers will continue to work for generations. That's important as we face the future."

Cleveland-Cliffs is trying to help restore the Midwest as an economic powerhouse after the ravages of globalization over the last 25 or 30 years, Goncalves said.

"The big lie of globalization was shipping jobs to countries that cost less with the excuse of efficiency, using the word efficiency to basically exploit people to benefit a few," he said. "I do not agree with that. I believe it made us as a country weaker."

It's not something that can be fixed in days or weeks, Goncalves said. It will take decades. 

But the pandemic and resulting supply chain shortages have exposed the folly of outsourcing so many jobs and operations overseas, Goncalves said.

"Right now we're seeing so many companies that have been benefiting from the destruction of wealth of the American worker to suffer the consequences of what they did," he said. "I can't help myself but to like that. Even though I'm a good Catholic, I can't help myself but to like that. It will make them learn in a way that they'll never forget. Produce right here in America with American workers with a short supply chain. Then we're a powerhouse. Then we're a true power. Other than that you are just at the mercy of capital. Capital will move where it's cheaper, not where it's more efficient."

Goncalves said the company, which acquired most of ArcelorMittal USA's operations in Northwest in late 2020, valued its people over shareholders.

"I do not work for the shareholders," he said. "I work for my people. I work for my company. If shareholders want to come for the ride, be my guest. Jump on the bandwagon. But that's not how we work. I work for my people and we work with the unions. We work well with USW. We pursue the same goals. We ultimately want the same things."

Mrvan said he was trying to help shorten supply chains by co-sponsoring the America Competes Acts. It levels the playing field so that semiconductors could again be manufactured in the United States of America, which would help both the automotive industry and the steel sector that supplies it, he said.

"I had a conversation that the reason they were being made in other countries was that it was the cheapest way it could be made," he said. "If we shorten that supply chain and they're able to produce semiconductors and chips here, as they plan to do in the next four to five years in Ohio, we're creating jobs and shortening those supply chain. In Northwest Indiana, when Ford shut down because they didn't have the chips and semiconductors, people stopped working there. When they stopped working there, that affected my district and the amount of steel you're producing. When we shorten that supply chain, we again say to ourselves and to the nation that we are supporting ourselves and investing in ourselves and will be able to produce things at a quicker pace."

But Congress can only do so much, Goncalves said. Companies also need to step up such as by buying pig iron made at Indiana Harbor Works in East Chicago or other Cleveland-Cliffs sites instead of buying the $1.2 billion worth of Russian pig iron the United States imported last year, Goncalves said.

"We will continue to tell our clients we're responsible for own actions," he said. "They can continue to partner with us if they want a shorter supply chain instead of a longer supply chain. These things don't happen because of an act of law. They need to do our part and we need to do ours as well. We don't have steel for everybody, and we have to be selective. That's what makes the price go up."

Higher steel prices, which rose to record levels last year, have benefited steelworkers, Goncalves said. They reaped thousands of dollars worth of profit-sharing bonuses in 2021.

"The workers do well. The union understands what I'm talking about," he said. "They're in the same boat as us. They want what we want. Some companies are pro-union. Other companies are anti-union. We're pro-union. We are pro-middle class. We're pro-worker. We're pro-capitalism. Think about what happened here in the Midwest over the past 25 years and you understand the picture."