Pittsburgh's heart of steel still beats amid transformed city

Surma, 55, a former Price Waterhouse accounting partner whose grandparents emigrated here from Slovakia early in the last century, says he helms a "technologically oriented business." The grades of steel his mills produce for General Electric's Profile series of appliances, for example, didn't even exist five or 10 years ago, he says.

"I don't think we should be viewed as being out of style or old-fashioned or anything like that," he says, gazing from his 61st-floor conference room down river to his grandparents' old neighborhood.

The summit's anything-but-steel marketing pitch, however, isn't just White House spin. Today, the Pittsburgh-area steel industry directly employs just 6,900 workers, and the 6.8% decline in that figure in the past year is more than twice the overall decrease in area non-farm employment, according to the state Department of Labor & Industry.

Long synonymous with steel, Pittsburgh in the past decade remade itself into an acknowledged center for health care, higher education, robotics, financial services and so-called green technology. The biggest employers now carry names such as University of Pittsburgh Medical Center and Carnegie Mellon University, a far cry from the city's heavy-industry origins. The summit is being held on a former riverfront industrial site at the David L. Lawrence Convention Center, the first such facility boasting the Leadership in Energy and Environmental Design (LEED) seal of approval.

"I don't even identify Pittsburgh with the steel industry," Mayor Luke Ravenstahl says.

The 29-year-old mayor is too young to remember either the industry's post-World War II glory days or its collapse amid the recession of the early 1980s. From a peak of around 90,000 jobs, the area's steel mills retreated under competition from foreign producers and smaller mini-mills, which use electric furnaces to melt scrap metal rather than convert iron ore. By 2000, roughly 80% of the city's peak steel workforce was gone.

In a way, steel died so that Pittsburgh's transformation could occur. The city's image as a gritty, dirty town was earned in the early and middle 20th century, when the pollution belched out of local steel mills obscured the sun and, famously, required the street lights to be turned on at midday, says economist Lester Lave of Carnegie Mellon University's Tepper School of Business.

New jobs sprouted in clean industries such as education and health care, luring well-educated professionals to the city nestled at the confluence of the Monongahela, Allegheny and Ohio rivers. "Yuppies don't live in polluted places. If Pittsburgh had not cleaned up, this transformation would not have happened," Lave says.

In the 1980s, U.S. Steel lost its original focus, acquiring oil, energy and other businesses and morphing into the diversified conglomerate USX. After 15 years, USX reversed the process, spinning off its steelmaking business into a reborn U.S. Steel.

But in the years leading to the financial crisis, U.S. Steel rebounded. From 2004 through 2008, it posted steadily increasing sales and robust profits. Advanced technologies made operations more efficient, while the company's researchers invented a steady stream of innovative metals. Its Gary, Ind., mill churned out steel for automakers, while the Edgar Thomson plant filled orders for Whirlpool, General Electric and Amana, carried aloft by the housing wave.

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