As the years passed, declining output led to layoffs and partial shutdowns. Republic Steel Corp. closed its doors piecemeal, unobtrusively, but rumors flew. Then, on September 19, 1977 -- "Black Monday" in Youngstown -- the fragments of foreboding finally coalesced into an awful reality: Youngstown Sheet & Tube announced that it was suspending its operations, throwing some 5,500 people out of work. At U.S. Steel, the mood grew significantly more somber. Already the work force at McDonald Works, where Houck was then a superintendent, had shrunk by half, to 1,750. Only 5 of the original 11 mills on the 372-acre site were still operating.
William H. Kirwan, general superintendent of the Youngstown district for U.S. Steel asked Houck to draft a plan giving the region a reprieve. For four months, as chairman of a Save the District" committee, Houck studied the company's strengths, weaknesses, and prospects. Then he offered his report. The Ohio Works should be shut down, he recommended. An electric furnace and caster should be installed at McDonald to feed its mills. The cost would be some $208 million. But it was an investment that would, he believed, ensure the district's survival and ongoing profitability.
His report went up to corporate headquarters in Pittsburgh in mid-November 1979. About a week later, November 19 -- a second Black Monday -- U.S. Steel revealed that it, too, was abandoning Youngstown. Kirwan and Houck's valiant attempt had not swayed the company from its foregone conclusion: It could no longer justify mounting losses or additional capital outlays. "What bothered us most," says Raymond Fowler, then an acting foreman with 14 years' experience, "was the way it was announced; it came over the radio at noon, and circulated through the plant." Fowler, married, the father of three young children, would soon be out of work.
"It was a devastating period of time," Houck remembers. Rallies, workers occupying U.S. Steel's local headquarters, suicide counseling programs, the Ecumenical Coalition of the Mahoning Valley, a group rnade up of steelworkers, clergymen, and concerned citizens -- it was a swirling maelstrom of activity. Houck, given eight months to produce heavy backup inventories for customers and then to mothball the mills, found himself torn between alternatives. He followed the emotion-laden maneuverings of the coalition, which incorporated as Community Steel Corp. and announced that it would seek up to the legal maximum of $100 million in federally guaranteed loans to reopen the facilities. He entertained the opportunity of a transfer to another plant. And he began to wonder whether he, himself, could resurrect the McDonald Works. "I would never, voluntarily, have said, 'I've had it, I'm going to quit this company and start my own,' " he notes. "After all, I'd come to U.S. Steel for the security -- give me my security blanket, my benefits, and protect me for the rest of my life."
Still, Houck had spent four months demonstrating that, with cutbacks in labor, increased productivity, and a focusing of its product line, the mill could be saved. He went back to his numbers and played with them. Imagine, he thought, a start-up work force of 75. No new furnace and caster. Not five mills -- that was too ambitious -- just one to begin with, the 14" mill the most profitable. A leasing arrangement rather than an outright purchase. And he came up with a brand-new number. It could happen, he figured, for $3 million. Within a few weeks, he had transformed elements of the "Save the District" report into a business plan.
As his men prepared for the final closing of the mills -- draining water lines, greasing bearings, turning heaters on massive electric motors to keep them dry--Houck encouraged them. "I told them, 'Don't break the windows, don't smash up the place; we're going to start it back up again.' " Before the last crew left, in July of 1980, he says, "They swept the floor . . . and it stayed that way for a year and a half." Houck, who stayed on to ensure that remaining orders were shipped, felt very much alone. "When you walk through that warehouse," he says, "and all you hear is the shutters swinging in the breeze and the pigeons cooing, it's very desolate."
Houck took his plan to a U.S. congressman from Ohio. That got him nowhere: "He practically threw me out of his office. He was mad at U.S. Steel for pulling the pins out from under the public." Then he visited the realty division of U.S. Steel, also without success. The corporation's managers had no qualms about someone else using its property; they had sold or leased other shuttered sites. But they were leery of dealing with someone who was still an employee. "They said, 'We don't want to talk to you, a superintendent, any more than we want to talk to those union guys in Community Steel. Climb into bed with somebody that can negotiate as a businessman.' " The itinerary of disappointment led eventually to The Bedroom Cocktail Lounge, Houck's favorite watering hole in Youngstown. "A friend came in, we got to talking, and I asked him, 'How do I go about raising $3 million?' "
That simple question yielded an introduction to David Tod, a scion of one of the oldest and most affluent steel families in the valley. The Tods, who started Brier Hill Iron & Steel Co., which merged into Youngstown Sheet & Tube, had become major stockholders in that company. David Tod, a business and mechanical engineering graduate of Massachusetts Institute of Technology, worked for several steel companies before becoming an investment banker. Eventually, almost inadvertently, he created Torent Inc., Youngstown's only venture capital firm, with attorney Daniel B. Roth.
