Duluth Works

The Duluth Works was an industrial steel and cement manufacturing complex located in Duluth, Minnesota, in operation 1915 to 1987. The complex was operated by the United States Steel Corporation. Officially, the plant's purpose was to supply the growing Midwest with steel finished products. Unofficially, they were built as part of a "gentleman's agreement" between U.S. Steel and the State of Minnesota to not impose hefty iron ore taxes on U.S. Steel in exchange for a fully integrated steel plant within Minnesota, whose mines furnished 80% of the ore to U.S. Steel. The combined works of the steel and cement plant were the largest employers in the city of Duluth and the fourth largest industrial complex in the state of Minnesota.

The Minnesota Steel Company

In 1907, U.S. Steel agreed to build an integrated steel plant in the vicinity of Duluth, Minnesota, which was 70 miles (110 km) from the largest iron ore source in the United States, the Iron Range. U.S. Steel theorized that by using the Great Lakes it could haul limestone and coal to Duluth from the lower lakes, and return with a load of iron ore from Minnesota, which they previously only hauled from Minnesota, returning empty. It was thought that by using this process, Duluth would become a great center of manufacturing in the United States.

In June 1907, U.S. Steel incorporated the Minnesota Steel Company, a wholly owned subsidiary, to manage and care for all plans of the future developments of the steel plant. This included homes for its new employees, to be built adjacent to its new plant in Duluth, which eventually became known as Morgan Park, named for J.P. Morgan, chairman of the board for U.S. Steel. This innovative planned company town was only open to employees of the Minnesota Steel Company and later, the companies that followed.

Although a subsidiary of U.S. Steel, which at the time was headquartered in New York City, the Minnesota Steel Company's general offices were located in Morgan Park, in a building adjacent to the gate of the plant. The officers of the Minnesota Steel Company all held positions within the U.S. Steel Corporation, much as did Minnesota Steel's sister companies of Carnegie-Illinois Steel and the Tennessee Coal, Iron and Railroad Company.

Building steel for the west

The Duluth Works primary purpose was to build steel for the expanding Midwest prairies and far west plains. When first constructed, it was originally intended to build rails for the expanding railroads, but by the time the mill was completed in 1915, the railroads had already reached their peak of construction and it was felt that those needs could best be handled from the Chicago area. So after completing its rail mill, it was converted into billet finishing facilities. In 1922, after going over what products would best serve the plant's existence, U.S. Steel decided to expand its Morgan Park operation and built a new wire, rod, Nail mill, and fence post fabrication facility. These products, it was felt, best suited Duluth's capabilities for integrated steel production. Yet, even after the expansion of these facilities, the Duluth Works only consumed 20% of its own steel production for its finished products. The rest of its semi-finished steel was shipped to other facilities for finishing. Even more disheartening, its proposed 12 state market area and areas of Canada were sparsely populated and able to be supplied with products from other mills. Despite these early predictions, Minnesota Steel remained at work producing steel products right up to its very end. Some of its products were only produced within the U.S. Steel Corporation at the Duluth Works facility. These included steel wool, certain nails, fence and fence post and a new product introduced in 1954, welded wire fabric, primarily for use with concrete to produce more sturdy road construction. Some of this material was used to produce missile silos for the U.S. Air Forces' Strategic Air Command throughout the Midwest.

End of a company, start of another

Following World War I and the 1920s, of which Minnesota Steel enjoyed great success and profit, the Great Depression hit the country. The barely 15-year-old Duluth Works was affected just as bad as the rest of the country. The blast furnaces, coke ovens and open hearths were idled at times, leaving only the finishing mills operating. in 1935, one of the two blast furnaces was dismantled. The benzole plant closed in 1939. Things looked bleak for the young facility. It was realized within company headquarters at U.S. Steel, that it had to re-organize some of its less profitable divisions to try to maintain its profit within the industry. With the newfound focus of the Duluth Works on wire products, in 1932 it was decided to move the Minnesota Steel Company's holdings under the umbrella of the American Steel and Wire company (AS & W), another division within the vast U.S. Steel empire. The Minnesota Steel Company now existed only on paper. For the next 24 years, the American Steel and Wire Company ran the operations at the Morgan Park plant. In 1964, the American Steel and Wire division was absorbed once again into the U.S. Steel umbrella, under its Operations Division, and with it, the Morgan Park operations were known thereafter simply as "the Duluth Works".

Beginning of the end

The late 1960s brought to a head many issues affecting the Duluth Works. Besides being over 50 years old, U.S. Steel hadn't heavily invested into modern improvements at the plant. This included basic oxygen furnace (BOF) technology that was already being installed at other U.S. Steel plants to replace the outdated open hearth furnace technology, but wasn't installed at the Duluth Works. Also, foreign steel producers were selling to U.S. customers massive amounts of steel at a far lower price than US steel producers could match, a process known in the industry as "dumping". The plant also was a major source of pollution, another key issue brought to light in the late 1960s. But the main problem was still the lack of a regional market big enough to justify U.S. Steel making multi-million dollar improvements to a facility that wasn't really needed in the first place.

The hammer falls

In June 1970, the Minnesota Pollution Control Agency (MPCA) asked U.S. Steel to provide documentation on its pollution output at its Duluth facilities and a two-year window to implement a follow-up plan. In the fall of 1971, the United Steelworkers of America threatened to strike as well. The years of problems, bad market location, old facilities, and now pollution and foreign competition had finally come to a head at U.S. Steel headquarters. Rather than deal with the issue of spending millions of dollars to improve the Duluth Works, U.S. Steel announced in September 1971 that it would shut down the "hot side" of operations in Duluth. This included the blast and open hearth furnaces and the pig iron shop. 1,600 steelworkers were affected. In January 1972, U.S. Steel chairman of the board, Edwin H. Gott, announced that the hot side of the Duluth Works would never again reopen, but that operations would still continue at its steel finishing, coke and cement facilities. But that hope was only short-lived. In October 1973, U.S. Steel announced it was closing the "cold side", or finishing mills, at the Duluth Works leaving another 800 employees out of work. (Several smaller companies would make the former "cold side" facilities their home following the closures, such as Hallett Wire, Priola and Johnson, the Duluth Missabe and Iron Range Railway, and Zalk Josephs, making steel related products until 1987, when Hallett Wire - the last remaining manufacturing tenant left the Duluth Works Industrial Park. Only the Realty and Development Division of U.S. Steel and some operations of the DM&IR railroad were left.) Then in 1976, the Universal Atlas Cement Company, a subsidiary of U.S. Steel at the Duluth Works operating since 1916, announced it too would close, despite assurances that the facility wouldn't close. Another 200 employees would lose their jobs. Finally, in 1979, U.S. Steel announced it was closing the last of its operating assets in Morgan Park, its coke plant of the Duluth Works. By 1981, the last vestige of the United States Steel Corporation's steel making operations in Duluth, once the city's largest employer, had come to an end.

The future

In 1975, beginning with the open hearth building, U.S. Steel began to demolish much of the massive structures that dotted the 1,600-acre (6.5 km²) sites and began preparing the industrial park for future development. In 1984, following an inspection by the Pollution Control Agency, the former Duluth Works steel plant site was put on the National Priorities List for the federally funded "superfund" program. Areas of heavy pollution were found on the site and were required to be cleaned up by U.S. Steel. This process has been ongoing since that time, but the site still has areas of concern by residents, future developers and pollution and environmental agencies. The city of Duluth has recently purchased the cement plant site and is developing that 65-acre (260,000 m²) area through its Duluth Economic and Development Authority (DEDA), although U.S. Steel still owns the 640-acre (2.6 km²) former Duluth Works land. In April 2008 the Duluth based photographic enhancement company, Ikonics, announced it would develop 40 acres (160,000 m²) on the property to build a warehouse and, later, move its West Duluth headquarters operations to Morgan Park at the former Atlas Cement plant site. Development at the long vacant site will begin once again. On February 5, 2009 the State of Minnesota awarded the Duluth Port Authority a $50, 000 investigative grant to determine the feasibility of re-developing 123 acres (0.50 km²) of the former steel plant site as a 35,000-square-foot (3,300 m²) warehouse and light industrial park for storage of energy creating windmills. The investigation is ongoing. On February 9, 2011 State Senator Roger Reinert sent a message proposal to Governor Mark Dayton suggesting the placement of the Minnesota Vikings stadium at the Duluth Works site.

Plant details

The Duluth Works was an integrated steel plant, meaning it took several raw materials and put them together in furnaces to make a product. Of those raw materials, iron ore, which was a mere 70 miles (110 km) away from the Duluth Works on the Iron Range, was in plentiful and nearby supply. But it also took coal and limestone and many other materials to make steel. These materials had to travel vast distances to get to the city of Duluth. (This factor also made Duluth "undesirable" in the eyes of many industry leaders as a manufacturing metropolis, since only one key mineral was found nearby, thereby costing companies more to haul other materials there to produce a product in Duluth and making less a profit than elsewhere.)

In the U.S. Steel empire, these materials, and transportation thereof, were all taken care of within the branches of the vast U.S. Steel subsidiaries, all of them mentioned below, having had headquarters in Duluth. The iron ore was mined on the Iron Range by U.S. Steel's own Oliver Mining Company and then hauled down by rail on the Duluth, Missabe and Iron Range Railway (DM&IR) directly to the Duluth Works. The coal, which was mined out on the East coast, was hauled by rail to Great Lakes ports and sent to Duluth on lake carriers by its own Pittsburgh Steamship Company. The limestone from Michigan needed to purify the iron ore in the blast furnaces and used for cement making, was hauled by lake carrier to Duluth by the Bradley Transportation Company.

Scrap material and other bulk freight, was moved at the Duluth Works by several rail carriers over the years of operation, other than the Duluth, Missabe and Iron Range Railway. The most notables, were the Soo Line, the Northern Pacific Railroad, the Duluth, Winnipeg and Pacific Railway, the Great Northern Railway, the Milwaukee Road, and the Canadian National Railway among others. In addition, Minnesota Steel, American Steel and Wire, DM&IR, and finally U.S. Steel all had locomotives within the plant itself for moving its material, and several were serviced and repaired there within the Duluth Works own locomotive machine and repair shops.

The steel and cement plants of the Duluth Works were both serviced by rail via a long rail trunk that intersected several other major rail lines that met in the area. This rail yard was known as the Steelton Yard, and still exists today in the same location between the former steel mill materials yard and the Duluth neighborhoods of Gary and New Duluth. This yard, once owned and operated by the DM&IR, is now operated by the Canadian National Railway.

Finished and semi-finished products from the Duluth steel works, were taken by rail through the Steelton Yard over the Oliver Bridge, through the south end of Superior, Wisconsin and brought to loading docks at Allouez Bay just south of the Superior entry for loading by ship to other markets or further finishing.

Duluth Works facilities

The Duluth Works steel facilities were, upon construction in 1915, among the most modern steelworks in the world. This designation was very soon eclipsed by others. The plant, although massive in scale to most people, was among one of the more modest facilities within the U.S. Steel empire. At 973, 000 tons of steel making capacity a year, it was nowhere near the massive steel plants of Homestead or Gary. In fact, U.S. Steel bought more land when it built the facilities on purpose, in part due to speculation, that more subsidiaries and other steel related industries would move to the unoccupied land on the site to consume the plants products, but this was not the case. The only other major tenant on the site, was the cement plant of the Universal Atlas Cement Company, a direct subsidiary of U.S. Steel. A smaller company named Priola and Johnson, took open hearth and blast furnace slag and granulated it for other uses on the plant property.

The Duluth Works featured a ten furnace open hearth steel production facility, two blast furnaces, 110 oven by-product coke plant, a benzole and toluol plant, a by-products refinery, coal and coke conveyors and crushing and sizing towers, a pig iron casting facility, a blowing house powerhouse, a Heine boiler house, fresh water pumping inlet station, a hot gas soaking pit and stripping building, a massive rolling facility consisting of a blooming mill, 28" rolling mill, billet finishing department, hot gas re-heating beds, bar finishing department, fence post fabrication unit, merchant mill, wire, nail, fence and welded fabric mesh building, machine repair shop, three massive materials yard crane bridges and loading/unloading docks, locomotive engine repair and servicing building, its own railyard, a lab, an ore thawhouse, a coal thawhouse, and various warehouses and other structures. When initially completed in 1916, the steel plant site alone had 48 buildings listed, the size of a small community.

Legacy

The story of the Duluth Works is one of overspeculation, and the use of the weight of politics and government involvement in private enterprise for the attempted benefit of the many of an otherwise economically depressed region. U.S. Steel never wanted to purposely build a steel-making facility in Duluth, but the weight of the State of Minnesota with a threat to impose ore taxes that would hurt a healthy profit margin on the iron ore removed from the state ultimately proved a powerful negotiating weapon against the largest corporation in the world at the time, the United States Steel Corporation. When U.S. Steel agreed to build the plant in Duluth, the state dropped its iron ore tax threats. When the Corporation wished to pull out or impose negative actions on its Duluth plant, the State stepped in with its leverage again. This continued until the 1970s when the hurting U.S. steel market was in such trouble, that U.S. Steel had little choice but to restructure its operations for the future, or stare its own demise down in the face of foreign labor and production competition, new environmental laws, outdated technologies and old facilities.

The closing of Duluth Works foreshadowed events that were taking place all over the nation during the 1970s and 80s in traditional steel strongholds like South Chicago, Homestead and Pittsburgh. Plants that were old and outdated for many years, were now closing all over the country throwing thousands out of jobs. It was a trend that didn't reverse itself until the mid-1990s, when growing world demand, newer technology and consolidation within the industry has brought it back from near death.

Today, U.S. Steel is one of the most efficient producers of steel in the world.