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| Tapping a Blast Furnace, image from ArcelorMittal |
Before he came to Blue City Cycles
to work as a bike mechanic, Mike Okelman got 2 engineering degrees and worked
at a steel mill in East Chicago – home
of the largest blast furnace in the Western Hemisphere in fact – where he made
4 times as much money as he ‘s making now.
Engineering is the kind of
profession his parents wanted for him, and steel mills offer the kind of
secure, well-paid jobs that have become hard to find. But after 4 years in the mills, Mike says the
work he does at the bike shop is more satisfying, and it also supports a more
sustainable lifestyle.
Mike always knew he wanted to do
something technical. He had an
idealistic admiration for American manufacturing and an abiding respect for the
labor unions that made industry a source of good jobs. His parents wanted him
to pursue a professional career, so he enrolled at University of Illinois
Urbana Champaign to study mechanical engineering in 2002, and worked straight
through his bachelors and his masters by 2008.
Back in 2005, he toyed with the
idea of trying out an internship in the auto industry. “I was imagining working
on energy efficiency and fuel cells,” he says, but GM’s presentation that year
was all about the Hummer. Instead, he
found himself at a job fair talking to 2 guys from International Steel
Group. They had a table top model of a
steel mill they’d probably last used to recruit new talent 25 years ago. “No
one was talking to them,” Mike recalls.
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| Ladle of Steel photo from NW Indiana Steel Heritage Museum photo gallery |
2005 was an excellent year for
steel makers worldwide, as economies boomed the mills couldn’t pour metal fast
enough. But American steel makers had
been in decline for decades. In 1967,
the industry represented almost 5% of US manufacturing output; by 2001, it
represented less than 1%, and the labor needs of the steelmaking process had
dropped by a factor of 1,000. Recruitment
hadn’t been a priority for most mills in recent years, as evinced by that dusty
table top model. Plants that hadn’t shut
down were still rearranging themselves to find a comfortable position.
International Steel Group had just
purchased Acme Steel, a venerable Chicago company whose fortunes more or less tracked
the local industry – starting in 1880, when Acme first opened as a maker of
steel clasps and barbed staples. In the 19th Century, dozens of
small makers of steel goods were embedded in Chicago neighborhoods.
Over decades they tended to combine
into big vertically integrated operations that could smelt iron from ore, make
coke from coal, turn iron into steel, cast it into blocks and roll it into
finished materials. They also tended to precipitate on Chicago’s southern edge,
by Calumet, where raw materials could be brought by the barge-full to their
doorstep, and from where the beams, rails and pipe they produced could be
shipped to all points of the country, if they weren’t absorbed into the
construction of Chicago itself.
Acme opened a plant in Riverdale in
1918 as the Acme Steel Furnace Company.
Acme Steel employed 1,400 workers during the Great Depression, and by
the 1950s ranked among the top 300 largest manufacturing companies in the
nation. In 1964, it merged with Interlake Steel, itself a combination of
Federal Furnace and the By Products Coke Company – they were located just
across the Calumet River from Acme’s plant.
By the 1970s, Interlake Steel Group employed 3,500 in the Chicago area
and posted annual sales of nearly $700 million, even though the American steel industry
had already started its uneven descent.
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| Smoke Rising from the Indiana Harbor Works Plant image from NW Indiana Steel Heritage Museum photo gallery |
Steel making is dirty, dangerous
and energy intensive, so maybe it’s natural that the industry should move to
emerging economies less concerned with protecting their labor force and their
environment. When the steel industry
first got started in the US, native born workers wouldn’t take those jobs, but the
steel mills could staff themselves with immigrant labor. The immigrants worked 12 hour days until late
in the 1920s, and the unions didn’t get a foothold in the mills for another 10
years.
Decades later, when foreign
competition gained ground with lower labor costs and government subsidies, the
Americans still had the advantage of massive capacity in plants already built,
but their calculations about whether to maintain or modernize them were getting
more complex.
The big integrated mills weren’t
just expensive to build, they were hugely expensive to operate. Reheating a blast furnace after it’s cooled
down costs a lot, both in energy and in stress on the equipment, so the blast furnaces
would run continuously for years at a time.
Every 15 years or so they’d need to be overhauled, their insides gutted
and relined with new refractory brick.
When the No. 7 furnace in East Chicago was overhauled in 2014 the
operation took all summer and cost $70 million.
By the 1980s, more steel makers faced
with maintaining old equipment were opting to reconfigure as “minimills.” They’d
skip the costly process of reducing raw iron in the blast furnace, and focus on
the latter stages of processing steel. A
minimill might have an electric arc furnace for melting steel scrap, another
furnace for finessing the alloy’s chemical balance, and a continuous caster for
extruding semi-finished goods. To be
cost effective, integrated mills need to put out at least 2 million tons of
steel a year. A minimill might put out
200 to 400 thousand tons a year, and the electric furnace could be started and
stopped to meet changes in the marketplace in something closer to real time.
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| Relining Acme Steel's Former Blast Furnace |
Acme Steel spun off from Interlake
in 1986, unhitching itself from its blast furnace and the coke ovens on the
other side of the Calumet. By the early
1990s, it employed 1,200 workers, about the same number the old Acme Furnace
employed at its Riverdale plant. It was
still using oxygen furnaces from the 1950s, but in the 1990s they invested in a
continuous caster – a major modernization that would allow them to skip the intermediate
step of casting molten metal into ingots first, before rolling it into sheets,
bars or rods in a separate process. The
continuous caster extrudes metal through a track of rollers into long,
semi-finished products. Acme’s new caster
was employed rolling out spools of pipe.
They never quite recovered the
investment. Mike says it helped put the old Acme Steel out of business. By 2001 they were in bankruptcy protection
and finishing a phased shut down. The next
year, the shuttered plant was acquired by investors headed up by WL Ross. Ross got his start as a bankruptcy adviser,
he says he helped clean up the mess left by Mike Milken’s junk bond buyouts in
the 1980s.
By the 2000s, he wanted to intervene
more directly to turn troubled industries around. And there was clearly still
money to be made in steel. Competition is
global and margins are slim, but world consumption was exploding. The US was enjoying its housing boom and a
new heyday for really big cars. Emerging
economies were racing toward the middle class, pushing up prices for
commodities of all kinds, from metal to meat.
Ross’ investment fund first created
International Steel Group to reorganize Pennsylvania Steel. In 2002, ISG Riverdale reopened as a minimill
employing 250 workers. In 2005 the
company merged with Ispat Inland Steel Company in East Chicago, and LMV, a
holding company controlled by an Indian steel magnate, to form Mittal Steel
USA.
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| Blast Furnaces of the old Acme Steel |
That was also the year Mike took an
internship at the ISG Riverdale plant. He
says it was different from a big, union shop. Which is not to say the workers
at Riverside weren’t unionized. They
were a rough around the edges, but their roughness mainly expressed itself as
hijinks.
They used to call him Monica (you
know, because he was the intern); they once glued a little crown cut from a styrofoam
coffee cup to the top of his helmet and called him to the shop floor to see how
long before he figured out why everyone was chuckling. But then when he broke his foot in an
accident involving a radio flier wagon and a flight of stairs (not at work) the
guys in the machine shop made him a little stick figure model to commemorate
the incident.
Mike says the Riverside plant
itself was almost quaint. The carts and
moveable equipment all still said “Acme” on them. They didn’t melt their own iron anymore, it
trundled over from Indiana in torpedo shaped rail cars, the big vessels of
molten metal passing through residential neighborhoods, apparently without incident. If it were to harden en route they’d never
extract the iron from the car.
They made it into high alloy steel
in oxygen furnaces that date back to the 1950s.
The whole room was coated in thick coat of kish – carbon particles
exhaled as graphite dust by the steel as it's chemistry is refined. Mike says it glitters in the air, it rains
over everything, settling as a thick gray smudge. The continuous caster was newer of
course. They used it to cast high alloy
steel into spools of small pipe that would be used for making things like knives
and golf clubs.
After graduation, when he took an
engineering job at the former Inland Steel mill in East Chicago, their
continuous caster would be turning out spools of pipe for oil pipelines and sheet
metal for the auto industry -- materials for big industry and massive infrastructure
projects. A 3,100 acre integrated mill, the
East Chicago plant, now known as ArcelorMittal Indiana Harbor, is the largest
plant in North America. It employs 4,900
workers and puts out 9.5 million tons of metal a year.
Collectively, America’s big integrated
mills still produce almost 90 million tons of steel annually, and have remained
attractive acquisitions, even if no one is building new blast furnaces in the
States anymore. Inland Steel was
acquired by ISPAT, another company controlled by the Mittal family, in 1998. Ispat Inland became part of Mittal Steel USA
in 2005. Then, in 2007, Mittal Steel and
Arcelor, the 2 biggest steel companies in the world, merged into one.
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| Indiana Harbor Ship Canal image from NW Indiana Steel Heritage Museum Photo Gallery |
When Mike came to work at the
Indiana Harbor plant in the summer of 2008, world steel was still booming and
the ArcelorMittal was on a buzz, calling meetings at their Indiana plant to
announce all the great new benefits they’d be extending. A few months later big banks were collapsing
and all those new benefits were quietly dropped.
The steel industry has always
cycled between boom years and catastrophe – by 2010, the industry was cautiously
recovering, by 2013 it was declaring a rebound.
Back in 1999, the Chicago Tribune ran a feature on the steel industry
that profiled Inland’s famous No. 7 furnace (built in 1980, 10 years into
American steel’s decline) and the trends that had gone on to close two-thirds of
the nation’s blast furnaces in the 20 year since it was built.
Workers were boasting to the
reporter about the hellish working conditions, and about their deep attachment
to their work, an attachment the reporter attributed to “the lore of the
furnaces, and the psychological rush of harnessing raw – and potentially deadly
– power to create something.”
The reporter observed that the process
of steelmaking is basically unchanged from what it was a century ago, when
Inland first opened the mill. But
engineers are still employed refining the process, partly because molten metal doesn’t
readily submit to controlled study. Before computers, Mike says engineers would
use water models to project how it would behave, because water has the same “kinematic
viscosity,” it pours the same way. Now
they use computer modeling to study fluid flow, heat transfer, factors that
might cause molds to break, or cause defects in the steel. They’d test the latest equipment being
pitched by vendors.
Steel mills use water applied with
a system of nozzles for cooling. One of
Mike’s projects at the East Chicago plant was to investigate a new cooling
system. For a year, they took measurements,
studied blue prints, consulted with nozzle makers and other engineers, and
concluded the new system would have definite advantages – it was more flexible
and could reach parts of the process that were particularly hard to
access. But in the end it was shelved as
too expensive to implement.
The global financial meltdown did
not help. The Indiana Harbor Plant tightened
its belt. Workers who could retire did so.
The company reassigned engineers, including Mike, to work as supervisors
on the floor. That was technically a step down, though Mike says he liked the
work more. He hadn’t been drawn into the
field by the promise of computer modeling. “I’m very hands on. I want to build things…I want to be part of
the process.”
On the floor there was lots of
moving equipment and parts were always breaking, there were literal
fires to
put out. Between castings, the supervisors
and their crews would go over every part with a checklist, performing audits and
writing maintenance reports. The
supervisor takes attendance, makes sure everyone’s appropriately deployed – and
then inspects the quality of the steel as it rolls out from the of the caster.
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| Steel moving through a continuous caster image from ArcelorMittal |
The molten metal starts to cool as
it passes through the casting machine, it forms a hardened skin, or sleeve,
that allows it to move smoothly over a system of rollers that are working it
into shape as it passes over them. If
the metal cools too fast or too slowly, it might break out of the sleeve and
create big problems. Or if a roller gets
stuck, or mucked up with pieces of debris, it’ll leave tell tale imprints in
the finished steel.
A ladle of molten metal can be
worth a million dollars. Mike says
you’re taking chemical samples throughout the process to make sure the
composition of the metal is right – if it’s not, you can sometimes fix it, but
steel can also be “poisoned” by an excess of certain ingredients, like copper
for instance. And once it’s poured, if
it doesn’t react the way it’s supposed to in the mold, it could spill over, or
explode – like a lethal home baking project.
So the work was interesting, but
the atmosphere was tense. And that rash
of retirements only widened an experience gap created by decades of industry
consolidation. The floor was manned by a lot of guys with 30 or 40 years of
experience, and a few new guys with 1 or 2 years. It wasn’t easy to be a 27 year old, supervising
salty workers in their 50s and 60s. And there
was nobody with 10 to 15 years who could remember how they were trained. The old guys were often impatient to stop and answer
questions, or to show the new guys what they knew.
He recalls there were a lot of
strong egos, a lot of communication accomplished by in your face shouting matches
– a method encouraged by the physical intensity of the mill, which is basically
a huge open air warehouse. It’s freezing
in winter, or sweltering when they’re pouring steel.
“You can easily kill yourself. You’re not always sure what you should or shouldn’t
do,” Mike recalls. There’s molten metal,
poisonous gases and explosive steam. “Mistakes
are either life threatening or they cost a lot of money.”
There were several guys who died
while he was at East Chicago plant. One
guy got crushed by a leg of a gantry crane; another was crushed in a truck-rail
collision. One of the supervisors was
killed by a sudden steam explosion; a senior supervisor he knew succumbed
abruptly to mesothelioma -- he woke up one morning and he couldn’t breathe, they
rushed him to the hospital and he was dead before afternoon.
The mills needed to be staffed around
the clock, and they were short staffed, so everyone was logging in long hours. The
long hours meant that Mike was making good money, and also that he had no
outside life, so he wasn’t spending any of it. He paid off all his student
loans, and then he started socking as much as he could in retirement account.
And then, after 4 years, he had enough.
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| Inside the Shed image from NW Indiana Steel Heritage photo gallery |
“I got to the point I realized it
was important to me to respect and like the people I work with,” which was not the
overriding atmosphere at the mill.
Now, he jokes that he uses more of the skills
he’d hoped to use as an engineer working at the bike shop. It’s certainly a hands-on job – with a lot
less housekeeping and filing of reports.
The mechanics each have an area of unofficial specialty based on their
favorite kind of bikes. Owen Lloyd, one of the shop's owners,
gets any English tourers or racers that come
in the door. “Owen’s an English three
speed kind of guy,” Mike’s a Japanese road bike kind of guy himself.
Even customer service never approaches
the stress of the mill. A lot of Blue
City Cycles’ customers are in the service industry, they’ll do the mechanics
little favors, like bringing donuts to the shop.
Some customers won’t bring their
bikes in for service until they’re completely unrideable, they make for
entertaining stories -- like the guy who came in with a flat that he’d kept
riding even as the inner tube was forced out of the tire and wrapped around the
rear gears, he rode it until the wheel wouldn’t turn anymore.
Then there’s the customer who had
her bike in for brake adjustments a few times, and then came back one day to
buy the tools and cables to do the repair herself. “We love that,” Mike says “We were like give
us a call if you have any trouble…”
Feel good stories aside, you’d
expect the most significant drawback to Mike’s career change would be the
effect on his financial well being . His
earnings have been greatly reduced. Probably
part of the reason he can swing it is because he’s not raising kids right now.
But the bike shop also helps sustain
him in indirect ways. Because it effectively ties all of them in with a
community -- of customers, and of owners and employees of the neighboring
businesses . They’re embedded into the
neighborhood; it’s quality of life benefit that spills over in immeasurable, but
material ways.
The clearest example is Mike’s
apartment. It’s just few blocks from the
shop; he pays a very reasonable rent. He
leases it from the girlfriend of the owner of a business across the street. It’s an apartment that’s been in her family
for many years, so she probably doesn’t have to bring in big rents, she rents
the other apartment to one of her boyfriend’s employees.
Trying to live on a bike mechanic’s
wages would be very different in Logan Square, where DNAInfo just reported a
developer’s plans to build 500 square foot “micro apartments” with rents
starting at $1,200 a month.
Logan Square renters are paying a
lot for their neighborhood’s amenities – it is better stocked with hip restaurants,
boutiques and bars -- and for the street vibe that comes with them. Bridgeport has a street vibe too. It’s not based on cool-factor or cache, it’s
the vibe you get from running into 5 people you know between the coffee shop
and the drug store, and Mike thrives on that.
He lived in Humboldt Park near Logan
Square before he worked at Blue City Cycles, he says it felt more transient,
people live in an apartment for a few years and then they’re gone. There were plenty of neat restaurants and
neat little bars. “I’m the target
demographic for a lot of that,” he says but he thinks there’s something a
little artificial about them, like they’re decorated new to imitate the kind of
quirky, run-down color you find at a place like Bernice’s. “Why not just go to
Bernice’s?” The beer costs half of much.
And you might swap some stories with Mike Okelman there.
