CHICAGO -- Given its disastrous showing in the 1980s, when it dropped billions and shed 60 percent of its workers, you might expect the U.S. steel industry to be swallowing tons of aspirin and boarding up its windows.
But the recessionary alarms going off all around have yet to stir serious jitters in the steel industry, and analysts and industry officials say it is not a matter of bluffing or blindness.
The steel industry of the 1990s is very different from that of the 1980s, when the United States sank into its last recession, they say. Furthermore, few expect the economy to take as deep a plunge.
"The steel industry is in a much better position to weather the recession," said Christopher Plummer, a steel analyst for the WEFA Group, an economic forecasting firm in suburban Philadelphia.
It is healthier today, he and others argue, because it closed many inefficient plants, trimmed worker rolls and stepped up its modernization, thereby eliminating one of the reasons the U.S. industry was getting clobbered by foreign steel.
It also is sheltered from foreign competition until 1992 as a result of President Bush's decision to continue voluntary restraints against imported steel products.
Moreover, a weak U.S. dollar has boosted the market for U.S. manufacturers and their exports. The weak dollar has not benefited the steelmakers as much, since they never concentrated on foreign sales.
The most important change, say industry officials, is in the way they do business.
Many firms set up closer ties with customers to avoid being stuck with huge inventories or rocked by sudden cutbacks.
They also sought out Japanese partners, who now have business ties with all of the major U.S. steelmakers except Bethlehem Steel Corp.
The Japanese firms not only supply the latest technology -- and links to the Japanese auto transplants in the United States, which still prefer to deal with familiar Japanese steel firms -- but they also provide hefty financial resources.
Expecting the transplants' steel needs to grow as U.S. automakers' production levels decline or remain flat, companies such as Inland Steel have aggressively tried to establish ties with the Japanese, and succeeded.
As the economy steadily slows, none of the major steelmakers is expected to face bankruptcy, and Michelle Galanter Applebaum, Chicago-based steel analyst for Salomon Brothers, says that none is expected to suffer a full year of losses in a recession.
But that doesn't mean easy days are ahead. Once the voluntary restraints come off in 1992, experts are sure the foreign companies will rush back into the market.
Steel executives reply that they will be ready to file dumping charges or other violations of U.S. trade laws if the foreign firms continue to receive subsidies from their governments.
The future of USX Corp.'s USS steel division, the nation's major steel producer, stirs uncertainties for the whole industry. By shifting its steel operations last month to a wholly owned subsidiary, the firm was preparing to get out of the steel business, most analysts say. The question is who might buy the subsidiary and when.
USX, based in Pittsburgh, is not considered in a rush for the cash from such a sale. But it apparently wanted to put its house in order, asking the United Steelworkers to begin negotiations early, before the union's contract runs out Jan. 31.
Another suggested reason for the talks is USX's desire for a more favorable contract than other firms received last year, especially since the economy has stumbled.
As a result of rising labor costs, higher prices for raw materials and low steel prices, the profits per ton for the major steel producers fell from $40 last year to $16 this year, and Mr. Plummer of WEFA Group says it could decline by an additional 50 percent next year.
Indeed, Bethlehem Steel's decision earlier this month to halve a projected 8 percent price rise for Dec. 30 is a mark, analysts say, that buyers who have been hurt by the economic downturn will not accept such increases.