Really Rolling

In Pittsburgh last week, the optimism was as audible as the roar of the huge furnaces that poured forth white-hot metal day and night. Steel production is running ahead of last year, and orders are rolling in so fast that every week proves better than the last. First-quarter output should easily top 28 million tons --around 10 million better than hoped for. Looked at from any angle, the U.S. steel industry is off to what may be its best year ever.

One of the sick industries of the U.S. only a few years ago, steel looks so healthy today because steelmen have learned some modern lessons about how to take full advantage of national prosperity. After years of dawdling, they have finally become avid disciples of the latest cost-cutting and automation methods. At no firm has this conversion been more complete than at Jones & Laughlin, the nation's fifth largest producer--and nowhere have the results been more dramatic. On a sales rise of 6% (to $836 million) in 1963, J. & L. raised its earnings 76%.

Bosses in Tandem. J. & L. has had its share of hard times. The company emerged from World War II with facilities that a shortsighted management had allowed to fall into desperate disrepair. The long, slow rebuilding process started by Admiral Ben Moreell in 1947 gathered momentum when Avery Comfort Adams, a supersalesman drafted from Pittsburgh Steel, took over in 1957. Shortly before his death, Adams retired last year; since then, Jones & Laughlin has operated under two bosses working in tandem. President William Johnston Stephens, 57, an outgoing salesman type like Adams, runs the day-to-day operations. Chairman Charles Milton Beeghly, 55, who was president under Adams, manages money matters. Though a wizard at trimming costs, he says: "The steel industry is a sinkhole for money. To forge ahead, you've got to gamble."

In nine years, the company has spent $600 million to modernize. It was the first to take the long-shot gamble to develop large-capacity oxygen steelmaking furnaces and to use computers to control them, now leads the industry in this most efficient of all steel-producing methods. The company's oxygen furnaces cook steel four times faster than the best open-hearth furnaces, thus reducing costs by up to $8 per ton. J. & L. also saves money by using computers to handle everything from customers' orders to inventory control. It operates the most highly mechanized coal mine in the U.S. near Pittsburgh, led the way in sintering iron ore to make blast furnaces more productive.

Quick to Cut. J. & L. has been quick to cut back production of low-profit types of steel and concentrate on such items as the sheet steel that prosperous automakers and appliance manufacturers buy in large quantities. It is also diversifying into the lucrative stainless-steel market, is just completing a mill in Louisville, Ohio, that will step up its stainless output by a third.

In a drive for new markets, J. & L. is in the front line of the battle of cans v. bottles in the soft-drink business, and is moving to grab some of the gypsum board business with a low-priced steel wall partition. It is bringing out a thin tin foil to challenge the market now dominated by aluminum foil. And to please Detroit and stave off aluminum's attempt to replace steel in auto bumpers, it has developed a new bumper steel with extremely smooth finish.

The entire industry has made such vast technological changes and developed new products so successfully that experts predict that the price of steel (present average: $152 a ton) will be cut $30 or $40 by 1970.

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