Manufacturing, including steel and related industries, have led the U.S. out of the recession, but it will take consumers, the housing industry, employers and federal lawmakers to keep the country on the road to recovery, a top ArcelorMittal executive told area business leaders Thursday.
Mike Rippey, president and CEO of ArcelorMittal USA, told members of the Lakeshore Chamber of Commerce he sees positive growth for the steel industry in the next few years with pent-up demand for new vehicles, significant growth in the energy pipe and tube market and increased infrastructure work.
He said steel will continue to grow, but at a slower rate than in the past couple years. Still, he said while speaking at the Ameristar Casino ballroom in East Chicago, the U.S. market is holding its own against foreign competition, resulting in more exports.
“The fundamentals are good, but there are issues, like the fiscal cliff, that could derail our recovery,” Rippey said.
“I believe the government won’t go over the fiscal cliff, but if they do, we’ll go back into a recession,” Rippey said.
Rippey, a Northwest Indiana native, said housing and employment have been the two components missing in the recovery.
“There have been an enormous loss of jobs in the great recession. We lost millions and are picking up 100,000 to 200,000 a month. It’s not enough,” Rippey said.
He said housing drove the country into the recession and still hasn’t recovered. He said in 2006 to 2007 the average family couldn’t afford to buy a home, with average house prices at $220,000 while the average family only earned $50,000.
Rippey said housing prices have since dropped to an average of $178,000 while the average working family is earning $55,000. Add in low interest rates, and housing has become much more affordable.
He said it is up to the young adults to start buying houses, but they need to find jobs first.
“Many have moved back home. This is not the great American dream,” Rippey said.
He said more people need to become consumers, buying vehicles, appliances and houses, for the economy to grow.
When asked what he would recommend for high school students contemplating college, Rippey said students will need math, science and technical skills.
“I’m concerned about the steelworker of the future. We’re at fault because we didn’t hire a lot in the last 30 years, but now vocational schools are gone. Communities have neglected to prepare kids for jobs in manufacturing,” he said.
He said ArcelorMittal employs more than 10,000 people in Northwest Indiana in high-paying jobs.