I recently read an article in the Wall Street Journal (WSJ) regarding Braidy Industries’ decision to build a state-of-the-art aluminum mill on more than 300 acres in Eastern Kentucky near the town of Ashland, Ky. Construction is set to begin in early 2018, with aluminum production commencing in 2020. Production at the 2.5 million-square-foot mill is expected to be about 370,000 tons of aluminum per year. The finished product will serve the automotive and aerospace industries, and the initiative will create 550 manufacturing jobs.
Braidy Industries considered 24 potential locations for the mill, including Louisville, before choosing South Shore, a town of roughly 1,100.
New Technology. New Opportunity
Since that announcement, I’ve thought more deeply about the dramatic advances in steel and aluminum manufacturing technologies the article highlights. This new technology is the research product of the Massachusetts Institute of Technology (MIT) School of Engineering, an esteemed university with a track record for producing some of the most successful, innovative engineers and research projects in the world. The WSJ article notes the technology in this breakthrough manufacturing process can produce “a new sheet metal that will be 10% lighter and 500% stronger than ultra high-strength steel.”
Against this promising background, I believe it’s only a matter of time before this improved technology and new manufacturing processes prove obsolete the antiquated steel and aluminum plants that for too many years, sadly, have dotted our landscape. The bottom line for America is a superior material at a lower cost and a sharply reduced dependence on steel imports.
In that same WSJ article, Braidy Industries Chairman and CEO Craig Bouchard perhaps said it best: “There is a transformation going on in material science that is not much different than the transformation of the internet business 20 years ago.”
Appalachia: Ability. Resources. Willingness.
As I continued to weigh the MIT advancements, my thoughts were transported to President Donald J. Trump and his recent challenge for people and industries across our nation to “Buy American,” along with his push to create much stronger U.S. tariffs on the importation of cheap steel and aluminum, among other commodities. I then layered on top of these thoughts the advances in cheap electrical energy and natural gas we are blessed to have here in the states that border the Ohio River Valley. Our ability to reliably produce electrical energy in the Ohio Valley – including the transmission-line infrastructure currently in place – make Appalachia an ideal place to generate and transmit electrical power. Electricity can be a major energy source for many steel-production processes.
Another undeniably positive resource in this part of the country is our workforce, which, without question, is comprised of many, many able-bodied citizens “hungry for jobs.” From Cincinnati to Pittsburgh, this workforce has for generations made a living toiling in the coal mines and the steel mills along the Ohio River. These two industries, coal and steel, often are interdependent: when demand for coal is up (or down), the affect on steel is virtually the same (and vice versa). As I write this piece, both the coal-mining and steel industries are down. For the first time in eight years or so, politicians on both sides of the Ohio River – from Cincinnati to Pittsburgh (encompassing the states of Ohio, Kentucky, West Virginia and Pennsylvania) – are now looking to reverse the substantial job losses created by the Obama administration's attack on the coal industry. And make no mistake: the Ohio Valley has a highly skilled, willing and able workforce eager to earn a fair and honest living, without having to relocate to another part of the country. This is their home and this is where they’d like to stay.
It’s an interesting dichotomy. In many areas of the U.S., whenever a coal or steel company announces it’s looking to expand, large percentages of activist citizens will respond, “Not in my backyard.” Well, here in Appalachia, our response is quite different. Indeed, the vast majority of people in our region, where joblessness has taken its toll in recent decades, say, “Please, bring industry to our backyard!”
The above assertion is not mere speculation on my part, but rather something I have witnessed firsthand. In the last few years, I have opened two grassroots Portable Solutions Group, Inc. (PSG) manufacturing plants in Greenup County, Ky., within 30 miles of where the proposed Braidy Industries plant will be built. Though not nearly as large as the Braidy Industries complex, the two PSG plants employ about 200 skilled workers and have grown roughly 100% in the past 12 months. I attribute this growth primarily to the wonderfully skilled and enthusiastic workforce our area possesses. My take on our group of workers is that they value employment, a steady paycheck, self-esteem, and in no way wish to return to receiving the government assistance checks brought about by prolonged periods of unemployment.
Appalachia’s most valuable resources are abundant and, in no particular order, include:
- An enthusiastic, salt-of-the-earth workforce
- CSX and NS Rail Lines
- Easy access to interstate highway systems and river transportation
- Existing electricity generation and transmission facilities and infrastructure
- Cheap energy produced by natural gas and coal
Now then, where am I going with all of this?
I would call your attention to two geographic areas of the country that within the past 60 years or so have parlayed new technologies and/or ready-made resources into explosive job creation. One of those regions is the area in and around Raleigh-Durham, NC, which, several years ago, faced similar economic distress and uncertainty on a scale similar to what we’re experiencing here in Appalachia. Fortunately for the North Carolina region in question, it had a ready-made resource: access to an abundance of skilled professionals from a concentrated cluster of highly regarded universities. To their credit, government officials in North Carolina had the foresight and willingness to use those universities as a platform for creating what today we know as “The Research Triangle.” Today, the Research Triangle area has one of the highest employment rates in the nation.
The other geographic region of the country to which I call your attention is Silicon Valley, so named because of its leaders’ willingness to step forward and capitalize on a new technology that required the use of silicon chips in the manufacture of computers. This innovative technology improved the speed and performance of computers by many powers of magnitude.
Question:
Does this sound somewhat familiar to the MIT-created technology that is now giving rise to the Braidy Industries plant?
As Mr. Bouchard states, “Our team recognizes an opportunity to make incredible impacts both in the global aluminum industry and in bringing well-paying jobs to Eastern Kentucky.”
This begs yet another – and certainly more aspirational – question:
Could the Ohio Valley become to the steel industry what the Silicon Valley is to the computer industry?
While this may sound like a pipe dream and little more than “wishful thinking” on my part, there’s one thing of which I’m 100 percent certain: Virtually every successful business model and economic turnaround in history has started with positive thinking and a can-do attitude. Indeed, when it comes to resilience and creating economic vitality and vibrancy for the area I know, love and call home, I’m with Aniekee Tochukwu Ezekiel, author of Psychology of Friendship for Leadership, who once wrote, “There's always a moment that separates the past from the future, and that moment is now.”
