Divided America | How China fueled pain and Trump support

- Thursday, September 15, 2016 - 8 years ago No Comments 3,358 Views

A diesel tank at the former Ormet plant is seen at the site in Hannibal

Crushed by Chinese competition and feeling betrayed by mainstream politicians, workers in the hills of eastern Ohio are embracing Donald Trump and his tough talk on trade.
For decades, they and others living across the Ohio River in West Virginia found work in coal mines and at a local aluminum plant — union jobs, with good pay and generous benefits.
Coal is being wiped out by stricter environmental rules and competition from cheap natural gas. The aluminum plant? It’s out of business, doomed by China’s domination of the global aluminum market.
In an angry election year, some of America’s angriest voters live in places like Monroe County where local economies have been punished by price competition with China. Their frustration has fueled support for the Republican presidential nominee, with his belligerent rhetoric about the need to outsmart America’s economic rivals, tear up unfair trade deals and re-establish America as the world’s dominant player.
“This is Trump country,” says John Saunders, an official with the United Steelworkers in nearby Martins Ferry, Ohio.
The disaster that’s unfolded here isn’t obvious at first glance, not in a region known as the Switzerland of Ohio for its forested, rolling hills. In tiny Hannibal (population: 411), stately two-story homes overlook lawns that roll toward the banks of the Ohio. Nearby Woodsfield, seat of Monroe County, Ohio, looks like Main Street USA, its downtown dominated by a red brick courthouse displaying one of the world’s biggest clocks.
But the misery is real. Monroe County’s unemployment rate is Ohio’s highest at 10.2 percent. Families have moved out to find work. The number of children in the local school district is down 223, or nearly 10 percent, since 2013.
“You’re going to have to travel to find a job,” says Fran Poole, whose husband, Cecil, worked at the Ormet plant here for 37 years before being laid off when it closed.
Some laid-off workers chose to retire early. Others found work in the energy business, only to see those jobs melt away, too, as oil and gas prices fell. Some are doing odd jobs — cutting grass, hauling gravel.
Much of the damage to this region can be traced to China’s decision to become self-sufficient in aluminum production. Aluminum is used in construction and auto manufacturing, aerospace and consumer-product packaging. The surge in its production reflected a broader Chinese strategy: pour money into manufacturing to add jobs and accelerate economic growth.
Fueled by government subsidies and cheap loans from state-owned banks, Chinese aluminum producers went into overdrive: In 2000, the United States had produced a world-beating 15 percent of all aluminum, China just 11 percent. By 2015, China had escalated its output nearly 1,200 percent — and held 55 percent of the world’s share.
As Chinese aluminum flooded the world, prices collapsed. A pound of raw aluminum now fetches 74 cents — down from USD1.25 five years ago. U.S. production has tumbled 56 percent since 2000, according to the U.S. Geological Survey. And America’s share of world aluminum is below 3 percent.
Since 2011, U.S. aluminum companies have closed or idled nine of the 14 U.S. smelters, where aluminum oxide is turned into raw aluminum. Two surviving plants are running at half capacity or less. In Massena, New York; Columbia Falls, Montana; New Madrid, Missouri, plants have folded, idled production or laid off workers.
Hundreds of workers in New Madrid lost their jobs when Noranda Aluminum Holding Corp. sought bankruptcy protection in February.
“If you take metal prices back to where they were before China started flooding the market, you’re looking at somewhere between 90 cents and $1.10 a pound,” says Cameron Redd, a laid-off Noranda employee. At those prices, he says, the Noranda plant still “would be hiring.”
Relief probably hasn’t come. At this month’s G-20 summit, U.S. and Chinese officials agreed to work together to reduce overproduction of aluminum, but the Chinese have long balked at cutting aluminum output — and jobs.
“They don’t want unemployment,” says Michael Komesaroff of Urandaline Investments, and Australian consulting firm.
Longtime residents recall how vital the Ormet plant here was for the area’s economy and for supporting middle-class lifestyles. Workers regularly vacationed and bought houses and boats and all-terrain vehicles to tear up the Ohio countryside.
“If you didn’t go to college or the military, you went to the coal mines or Ormet,” says Bill Long, a former Ormet laborer who is a supervisor at the county’s Department of Job and Family Services.
The plant used to burn more electricity than all of Pittsburgh. For nearly six decades, barges plied the Ohio River and trains clacked alongside State Highway 7, bearing Ormet aluminum to customers across America.
The factory drew workers from the hills of West Virginia and eastern Ohio, paying them about $40,000 a year before overtime. Overtime was “sporadic,” recalls Carl Davis, a former Ormet worker who is now a Monroe County commissioner. “But a few were known to gross around $100,000.”
“Even though the work was hard back then, it was best job I had ever had, and the most money I’d ever had my hands on,” says Francis Blackstone, a 70-year-old Ormet retiree. “And the benefits were just unheard of” — including free health care.
“We were all family,” says Danny Isaly, an Ormet worker who became the plant’s head of industrial relations. “Everybody had a relative here.”
After the plant closed, Isaly received unemployment benefits until they ran out. Then he retired at age 59.
Niagara Worldwide bought the 1,600-acre complex at auction in 2014 after Ormet Corp. sought bankruptcy protection. Dan Gerovac is overseeing the plant’s destruction for Niagara. He and his crew are clearing the site in hopes of selling it to another industrial company. They are breaking down equipment — including the pots where aluminum oxide was turned into aluminum at temperatures of 1,800 degrees Fahrenheit — for sale as scrap metal.
“No aluminum will be made here anymore,” Gerovac says.
Through most of the 2000s — aside from a sharp drop during the Great Recession — world aluminum prices had withstood the surge in supply from China. China’s own economy was growing so fast its demand for aluminum was nearly insatiable. Then its economy decelerated after 2010, and aluminum prices plunged.
Desperate, Ormet and the Steelworkers union sought to renegotiate electricity prices from the local utility, Appalachian Power. In 2012 and 2013, they urged Gov. John Kasich to lean on the state utility commission to help. Kasich wouldn’t intervene, leaving the decision to the commission.
The plant went out of business.
Aluminum prices were so low the plant might not have survived anyway. But Kasich’s refusal to intervene helps explains why animosity for the governor runs high in these parts. In the March Republican presidential primary, Monroe County overwhelmingly backed Trump and rejected Kasich, who otherwise won his home state handily.
“He just shunned us,” Danny Isaly says.
Trump is viewed as a champion to many here who say America’s political leaders have stood by while competition from China and other countries has wrecked communities like Hannibal.
“He says what a lot of people would like to say,” says Cecil Poole, who feels the national Democratic Party has abandoned blue-collar workers. Trump’s pledge to “Make America Great Again” resonates with those who feel they’ve lost their place in the middle class.
In a way, some of the laid-off Ormet workers were fortunate for a time. When the plant closed two years ago, the region was enjoying an energy boom. Oil and gas companies were fracking in the Marcellus Shale formation, from upstate New York through Pennsylvania, Maryland, Ohio and West Virginia. They needed drivers, electricians, welders.
Poole, 62, and out of work after nearly four decades at Ormet, got a commercial driver’s license and found work hauling supplies for energy companies. He earned about what he made at Ormet, though he had to work twice as many hours for it. And Poole found the work exhausting. He traveled overnight and slept in his rig.
“It was tough on the old body,” he says.
He retired in June.
The fracking boom, it turned out, didn’t produce as many jobs as people here had hoped. The energy companies often brought in experienced oil-field workers. Then, energy prices started tumbling, and fracking work dried up.
Now, job openings are scarce, the pay and benefits no match for what Ormet offered.
“It’s embarrassing what’s out there,” says Bill Long, who counsels the unemployed.
Peeking out from one jobseeker’s file in his office is an application for a position at Dairy Queen. Long says some of the old Ormet workers seem in denial about their prospects. He recently ran into one.
“He said, ‘I keep hoping the plant’s going to fire back up,’” Long recalls. “I said, ‘That’s not going to happen, buddy.’” Paul Wiseman, Hannibal (Ohio), AP