Broken promises in the Rust Belt

WEIRTON, W. Va -- The steel mill in this Ohio Valley hamlet was built in 1909, before there was a main street, a school system, or a telephone grid. At peak production a generation ago, some 13,000 people clocked into the sprawling factory each day to produce the sheet metal for V-8 Chevrolets and the plating for armored personnel carriers bound for war in Vietnam.

Weirton's boutiques, diners, and dry goods shops thrived off the generous wages and pensions of mill workers and retirees. Once solidly Democratic, West Virginia was lured by its middle class prosperity into the ''silent majority" that elected Richard Nixon in 1972. It has swung back and forth politically in the years since, home to both Reagan Democrats and Clinton Republicans.

When the US economy boomed, industrial towns like Weirton prospered. For years, the Weirton Steel Corp. was one of the nation's largest employee-owned companies and it was good to its shareholders. Valley residents used to have a saying about the mill: That's not steam coming out of those stacks, but dollar bills.

These days, even as the United States has been recovering, Weirton Steel is producing starkly less of both. The company hasn't shown a profit since 1998, largely because of cutthroat competition from overseas, unfavorable exchange rates, factory automation, and rising labor costs. Weirton's once-robust Main Street is a dreary arcade of bars, strip joints, and a Chinese restaurant called Emperor Sichuan. Increasingly, steelmakers and other old-line manufacturing industries -- rubbermakers in Ohio, autobuilders in Detroit, plastics producers in Pennsylvania -- feel betrayed by a government that once relied on them for the very backbone of the country's economy. Workers and bosses alike blame Washington -- the Clinton and Bush administrations -- for abandoning them.

Rust Belt America is destined to play a crucial role in this presidential election year.

States like West Virginia, Pennsylvania, Ohio, and Michigan are almost evenly divided into Republican and Democratic camps, and Bush and his presumed Democratic challenger, John F. Kerry, are spending tens of millions of dollars in pursuit of precious electoral votes in these states.

Bush and Al Gore split these states in 2000. Bush, however, will find it difficult to repeat his modest success in this region by running on the economy.

Despite three straight quarters of strong growth, states like West Virginia are caught in the pincers of an economic transition driven by recession, technological advance, the swelling burden of workers' compensation, and the rise of China as a peer competitor.

During the Democratic primaries, candidates who bashed outsourcing or assailed ''Benedict Arnold corporations" -- as Kerry labeled companies that exported jobs -- won applause and votes in the Rust Belt.

Bush, meanwhile, was criticized this year when he let expire duties on imported steel he imposed in 2001 to give the industry a chance to regroup in the face of foreign competition. The tariffs were to last three years, subject to an 18-month review.

''This government broke its promise," says Mark Glyptis, the president of the Independent Steel Makers Union in Weirton. ''We needed the full three years, if for no other reason than the interests of our defense industry. If you have to rely on foreign sources for steel, how can we build battleships or tanks?"

The Weirton mill, which once churned out 4 million tons of steel products each year and operated four blast furnaces, now produces just over 2 million tons from a single furnace. Employment is down to 3,200 and Cleveland's International Steel Group, which is expected to buy the company out of bankruptcy this month, would likely cut staff by one-third.

''Weirton has a reputation for doing what has to be done to survive," says Gregg Warren, Weirton's director of government relations and a victim of the restructuring. ''But where does a redundant steelmaker go?"

In the last four years, West Virginia has lost nearly 9,000 manufacturing jobs, and its service sector, which accounts for the bulk of private sector employment, is not expanding fast enough to absorb new entrants into the job market. The state is trying to retool its industry for a more sophisticated, global marketplace, say economists and businessmen, but has had only limited success in attracting the kind of investment needed to develop high-value industries while weaning itself from low-margin ones.

West Virginia's showcase success, a Toyota Motor Manufacturing factory in rural Putnam County, employs more than 1,000 people assembling gears for auto transmissions. Secretary of Commerce Donald Evans toured the plant earlier this month -- in a not-so-veiled plug for Bush's re-election bid -- and celebrated it as a ''powerful example" of foreign investment in the United States.

Last month, Toyota said it would invest $80 million in the 184,000-square-foot facility, an expansion that would add another 50 jobs.

In the panhandle city of Martinsburg, Gene Criss runs Tiger Aircraft LLC, a small but growing company that makes a four-seat, private airplane -- the Tiger -- for small business owners. The company employs 40 people and expects to sell 26 units this year at about $240,000 each. Criss won't divulge how much of a profit Tiger makes on each sale but hints the company spends $135 million on the materials used to make each aircraft.

''Our goal is to build a unit each day," said Criss as he walks along a gleaming factory floor. ''We don't want to rush into anything, though. Supply and demand will get ya."

Tiger Aircraft and nearby jetmaker Sino-Swearingen Aircraft Corp., a San Antonio joint venture composed of US and Taiwanese investors, established operations in Martinsburg because of incentives made available by the state. ''We got a lot of help from the state's economic development team," said David Bartles, vice president of Sino-Swearingen's Martinsburg arm, which employs 73 people. Senator John Rockefeller ''met with us and made it happen."

Political analysts say, however, that for every worker newly employed in a Tiger-like start-up, others have lost their jobs at West Virginia's once-stalwart employers. From March 2001 to March 2004, West Virginia suffered a net loss of 13,400 jobs, a percentage decline of 1.8 percent compared with the national rate of 1.4 percent. Flexsys NV, a US-Dutch chemical maker recently said it will by next summer have closed its last rubber chemical plant in West Virginia, laid off 205 workers, and shifted production capacity to Belgium, where energy prices are cheaper. On the day Toyota said it would expand its Putnam plant, Dupont said it was closing a chemical factory in West Virginia at the expense of 92 laborers, part of wider plan to cut payrolls nationwide.

Bush tends to emphasize his record as a war president to this state's culturally conservative residents while soft-pedaling economic issues like healthcare and trade.

When Kerry stopped in West Virginia last month as part of a tour through blue-collar America, he attacked Bush for not being tough enough on countries accused of unfair trading practices, like China.

In fact, China's growing appetite is a double-edged sword for Weirton and other companies that produce the commodities that country needs to fuel itself. While steel prices have increased steadily because of Chinese demand and the temporary duties imposed by the Bush administration, so has the cost of raw materials needed to make steel, such as coal and scrap metal.

Largely as a result, Weirton posted a net loss last year of $500 million on sales of $1 billion.

High coal prices, while a boon to West Virginia's southern coal belt, have been particularly painful for Weirton Steel. Last year, a fire at the Pinnacle mine in Southern West Virginia, one of Weirton's principal sources of coking coal, was forced to cut back on production. That obliged Weirton to shut down one of its two remaining blast furnaces and furlough 600 workers.

''That was one of the main reasons we decided to sell to ISG," said Warren. ''They have their own coke mine."

Weirton would be the latest ISG purchase in an acquisition spree that includes such steel giants as Pennsylvania's Bethlehem Steel and ACME Steel of Riverdale, Ill. With each purchase, ISG cut payrolls and pensions and the laborers at Weirton are bracing themselves for the same fate. Glyptis, the union leader, says he expects the mill could lose a thousand workers.

From his office in Weirton's union hall, a Victorian-era telegraph station, Glyptis holds forth on the future of the steel industry. There is no computer on his desk, only a rolodex with yellowed cards and a patina of pink message slips that covers the desktop. Pinned to the walls are signs and placards that read ''Free Traders are Traitors" and ''America, Don't Abandon Steelworkers" -- the wheezing clarion calls of an industry under siege.

Glyptis, a third-generation steel worker, laments the consolidation of the industry as the unavoidable price of keeping mills like Weirton's alive. As a result of the bankruptcy, Glyptis says, pensions have been cut and some retirees have lost their healthcare.

The president blew his chance to win over Weirton by letting China off the hook, says Glyptis.

''I think Bush will pay for breaking his promise," says Glyptis. ''I've met with him and I've met with Kerry. We've heard the rhetoric, now we need action."

Stephen J. Glain can be reached at glain@globe.com.