PRODUCTIVITY IS THE LOSS OF JOBS:

American manufacturing--from chemicals to washing machines--is growing again. Spurred by stable labor costs, weaker unions and low natural gas prices, today's manufacturers have emerged from the recession far different from what they were even a decade ago. They employ more highly skilled workers, are more automated and have far fewer workers.

Globalization often is blamed for the travails of American manufacturing--from the relentless pressure of imports from lower-wage countries to outsourcing and overseas production by U.S.-based manufacturers. But globalization has its upsides as well. Not only does it often mean cheaper goods for American manufacturers, but it puts pressure on U.S. factories to become more efficient to keep up with global competition, making it possible for them to survive. [...]

After seeing the level of automation in Belgium, it wasn't hard to see what needed to be done back home. For example, in Gent, a computer coordinates the movement and processing of iron steel slabs, while in Burns Harbor, workers relied largely on phone calls, paper and brain power.

One Belgian computer model called Coordi tells workers when to pour liquid iron into ladles, when to mix in alloys and when to cast the steel into slabs, which is critical in avoiding expensive reheating of steel.

There were other smaller, but significant details. The Gent mill used a different type of nozzle attached to huge hoses that were used to remove flakes from 2,000-degree steel. Placed at a more efficient angle, the same amount of surface impurities could be removed with less water. Welders cut coils of steel to order, which kept waste to a minimum.

When Burns Harbor engineers returned, they made the quick and easy fixes first. They changed hose nozzles and moved the nozzle on 2,500 horsepower hoses used to scrub flakes off the steel closer, thus reducing the amount of power needed to propel the water. Those two changes saved the Indiana plant $1.4 million in energy costs, the company said.

Workers were directed to trim less rough steel off the sides of coil, saving the equivalent of 725 coils a year. "That's 17,000 cars," says Mr. Fabina, the mill's manager for continuous improvement.

Adopting the Coordi computer model took longer. Workers used to gathering information on their own and relying on experience and intuition had to attend classes on computer modeling.

Last year, Burns Harbor implemented Coordi at a cost of under $1 million. Since then, the mill has increased the average number of 298-ton caldrons of molten steel it produces daily, known as "heats," to 50 from 42.

Before "you'd write everything down on paper during the day, and then at the end of the day, type all the data into a computer," says Mike Williams, a furnace operator. Now "we watch everything come in during the day on computer screens." Expected savings: $1.3 million annually.

Inside a control room overlooking a red hot bucket of liquid ore, Chuck Shippen, a bearded man in his 60s, sits next to Mr. Williams. When the new computer system was introduced, they and other longtime workers had to be retrained.

Taking notes and tests was a big change. Mr. Shippen says his job is different but better now. "It is a little different to watch the screens here than to make 30 phone calls a day to collect information," he says.

Other longtime workers had to assume jobs they didn't have to do before. Paul Gipson, a 68-year-old electrical power inspector for most of his 44 years at Burns Harbor, says he and other senior workers have found themselves performing rote tasks he once delegated, like fixing light bulbs.

Such changes caused frustration among some workers, union leaders say. This summer, the union expects another tough bargaining battle. The United Steelworkers negotiates a single contract for all 12 of ArcelorMittal's U.S. facilities.

Despite the success of Burns Harbor, other mills and plants aren't faring as well, prompting company officials to argue that steelworkers are overpaid compared with other manufacturing jobs. "The way this company's talking, this battle is not going to be for the timid," says Pete Trinidad, a union rep at the mill.

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