Kaiser Steel

Kaiser Steel was an American steel company created by industrialist Henry J. Kaiser in response to the severe wartime shortage and high transportation cost of steel on the Pacific Coast. Incorporated on December 1, 1941, shortly after the United States entered World War II, the company developed an integrated steel mill at Fontana, California. The plant was deliberately located inland, roughly 55 miles from the Pacific coast, after federal authorities required the facility to be sufficiently distant from a possible Japanese attack and imposed limits on its initial wartime scale. The Fontana project was closely connected to Kaiser’s shipbuilding operations. Before establishing the mill, Kaiser had become a major West Coast shipbuilder, operating yards in the San Francisco Bay Area and elsewhere. His shipyards depended on steel transported from eastern mills through a congested and expensive national rail system, while wartime demand was already exceeding available American capacity. A western integrated mill promised a more secure regional supply and reduced dependence on shipments through the Panama Canal and across the continental United States. The Reconstruction Finance Corporation provided a $110 million loan for construction, helping Kaiser rapidly assemble the plant despite skepticism from established steel interests and government planners. Construction began in Fontana in April 1942. The first coke ovens entered service later that year, and the plant’s first blast furnace, nicknamed “Big Bess” after Kaiser’s wife, was started on December 30, 1942. In August 1943 the mill produced its first steel plate. Much of that plate went into ships built at Kaiser’s Richmond yards and at the California Shipbuilding yard on Terminal Island. During the war the facility also supplied structural forms, merchant bar, forgings for ordnance, and ingots exported to Britain under Lend-Lease. Its wartime ingot output exceeded that of the larger Geneva Steel facility in Utah, in part because Fontana began production earlier. After the war, Kaiser Steel expanded beyond its initial emergency role. It added furnaces, rolling equipment, and other processing capabilities, while pursuing vertical integration into mining and transportation. The company acquired the Vulcan iron mine near Kelso, California, and later developed the Eagle Mountain iron mine in the California desert. Because Eagle Mountain lacked a direct connection to the main rail network, Kaiser built the 52-mile Eagle Mountain Railroad, completed in 1948, to move ore toward Fontana. Coal remained a structural disadvantage because metallurgical coal had to be brought from Utah and other distant sources, but the company benefited from nearby limestone, regional power resources, and the growing California market. Kaiser Steel remained an important West Coast supplier during the Korean War and the postwar construction boom. By the 1960s, it and Geneva Steel held much of the Pacific Coast steel market. The company supplied steel for construction, transportation, industrial equipment, shipbuilding, and other uses. Its labor relations were comparatively cooperative during the major 1946 steel strike, allowing the Fontana works to continue operating while many competing facilities were disrupted. From the late 1960s onward, the company faced increasing pressure from lower-cost Japanese and South Korean producers, changing steel demand, aging facilities, labor and raw-material costs, and broader difficulties affecting American integrated steelmakers. Attempts to improve the mill and adapt its product mix did not reverse the long-term decline. The Fontana steelworks closed in December 1983, and Kaiser Steel entered bankruptcy proceedings that year. The company was liquidated in 1987. Much of the former Fontana site was subsequently redeveloped, including land used for Auto Club Speedway, while a smaller portion continued rolling operations under different ownership as California Steel I…

Henry J. Kaiser entered steelmaking from a background in construction and shipbuilding. His participation in major infrastructure projects, including the Hoover Dam through the Six Companies consortium, helped establish the industrial and political relationships that later supported Kaiser Steel. By 1940, Kaiser was also operating shipyards on the West Coast. Those yards faced a critical supply problem: steel purchased from eastern producers was expensive to transport, vulnerable to rail congestion, and subject to wartime scarcity. A West Coast steel mill could reduce the shipbuilders’ dependence on distant suppliers and strengthen the industrial capacity of the American Pacific region. Kaiser first proposed a California finishing operation in 1941, with raw materials and pig iron potentially sourced from separate facilities. Federal planners were initially cautious because of the uncertain postwar economics of a western mill and concerns about raw-material supply. The attack on Pearl Harbor and the rapid expansion of wartime production changed the policy environment. The Reconstruction Finance Corporation approved a $110 million loan, but required the plant to be built inland and initially limited to wartime needs. Kaiser selected Fontana in San Bernardino County, approximately 55 miles inland, because it offered rail connections, water resources, access to regional electricity, and proximity to the Los Angeles-area industrial market. Kaiser Steel Corporation was incorporated on December 1, 1941. Public notice of the Fontana project appeared in March 1942, construction began in April, and the plant developed at exceptional speed. Coke ovens operated by December 1942, when Kaiser started the first blast furnace, known as Big Bess. The works added further equipment during 1943 and produced its first steel plate in August of that year. The initial customers were overwhelmingly connected with the war effort. Kaiser plate entered Liberty ships and other vessels, structural forms supported industrial construction, and an adjacent Kaiser-operated ordnance facility used steel for forged military components. Some ingots were shipped to Britain through Lend-Lease. The plant’s supply chain combined local and distant resources. Kaiser acquired the Vulcan iron mine near Kelso, California, but the ore was not an ideal long-term source. The company therefore developed the Eagle Mountain mine, acquiring the property in 1944 and introducing its ore into the Fontana furnace in 1947. Because the mine was isolated from the established rail system, Kaiser built the Eagle Mountain Railroad. The 52-mile line was completed in July 1948 and connected the mine with Southern Pacific’s network. Limestone and dolomite were available from western quarries, and power could be obtained from regional hydroelectric resources. Metallurgical coal was more difficult: the company relied on distant Utah supplies, which imposed a continuing cost disadvantage. The immediate postwar years nevertheless brought strong opportunities. During the 1946 steel strike, Kaiser’s labor-relations approach allowed the Fontana operation to continue running at full capacity. With much European steelmaking damaged and other American mills disrupted, Kaiser could sell into a tight market and reach customers that had previously been difficult to serve. The company also expanded the plant, introduced additional furnaces and rolling equipment, and improved mining and metallurgical operations. The Korean War generated another production surge, while California’s population growth and construction boom created a substantial peacetime market. By the 1960s, Kaiser Steel and Geneva Steel were major suppliers to the Pacific Coast. The competitive environment then deteriorated. Japanese and South Korean producers increasingly supplied steel at prices that challenged American integrated mills. Kaiser’s inland location, expensive coal logistics, capital requirements, and exposure to changing product demand limited its ability to respond. The company pursued operational and product adaptations, but the Fontana mill entered a sustained decline. Steelmaking ended in December 1983, and Kaiser Steel went bankrupt and was liquidated in 1987. After the closure, the Fontana property was divided and redeveloped. Much of the former mill land was sold for other uses, including the site later associated with Auto Club Speedway. A smaller part of the complex continued to perform rolling operations under new ownership as California Steel Industries. Kaiser Steel is consequently remembered less as a continuing consumer brand than as a major wartime and postwar industrial enterprise that helped establish steelmaking at scale in the American West.

1. 1987Company liquidated

   Kaiser Steel was liquidated after entering bankruptcy proceedings.

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2. 1983Fontana steelmaking ends

   The Fontana steel mill closed in December after years of competitive and financial pressure.

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3. 1960Major West Coast supplier

   During the 1960s Kaiser Steel was one of the principal suppliers in the Pacific Coast steel market, alongside Geneva Steel.

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4. 1948Eagle Mountain Railroad completed

   Kaiser completed the 52-mile company railroad linking the mine to the Southern Pacific network.

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5. 1947Eagle Mountain ore tested

   The first test charge of Eagle Mountain ore entered the Fontana blast furnace in June.

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6. 1944Eagle Mountain property acquired

   Kaiser acquired the mining claim that became the Eagle Mountain iron operation.

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7. 1943First steel plate rolled

   The plant produced its first plate steel in August for Pacific Coast shipbuilding.

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8. 1942Fontana mill construction begins

   The Fontana site broke ground in April, and its coke ovens were operating by December.

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9. 1941Kaiser Steel Corporation incorporated

   Henry J. Kaiser incorporated the company on December 1, creating the corporate vehicle for a proposed West Coast steel mill.

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Large integrated steel producer serving West Coast industrial, construction, transportation, and defense markets.

• Steel plateFlat steel products1943

  Steel plate was Kaiser Steel’s most visible wartime product. The Fontana mill’s first plate was produced in 1943 and supplied Pacific Coast shipyards, including Kaiser’s own Richmond operations and California Shipbuilding on Terminal Island. Plate production supported hull construction and other heavy industrial applications.

• Structural steel formsLong and structural products1943

  The Fontana works produced structural forms for construction and industrial projects. This product category helped Kaiser move beyond its original shipbuilding role and participate in the postwar infrastructure and building markets.

• Merchant barLong steel products1943

  Merchant bar was among the finished steel products made at Fontana during the wartime production period. It served general fabrication and industrial customers and formed part of the mill’s broader postwar product mix.

• Forged ordnance componentsDefense steel products1943

  Kaiser supplied steel for forged military components, including shells and other ordnance-related products. A nearby government-owned, Kaiser-operated forging facility processed material from the Fontana works during World War II.

• Steel ingotsSemi-finished steel1943

  The integrated mill produced steel ingots for internal conversion into finished products and for shipment to other customers. Wartime ingot production exceeded one million short tons, with some output exported to Britain under Lend-Lease.

• 1983Close the Fontana steel millOther

  The company faced sustained competition from Japanese and South Korean steelmakers and broader structural problems in the American integrated steel industry.

  What changed. Kaiser ended steelmaking at Fontana in December and subsequently entered bankruptcy proceedings.

  Aftermath. The company was liquidated in 1987, while portions of the former site were redeveloped and a smaller rolling operation continued under different ownership.

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• 1944Develop a company-owned iron supply chainStrategy

  The Vulcan mine near Kelso provided an initial ore source, but Kaiser sought a larger and more sustainable deposit for the Fontana works.

  What changed. The company acquired the Eagle Mountain mining claim and subsequently built its own railroad to connect the mine with the main rail network.

  Aftermath. The move strengthened Kaiser’s vertical integration and reduced dependence on outside ore suppliers, although coal logistics remained costly.

  Eagle Mountain Railroad construction cost. 3.8 million US dollars (1948)

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• 1941Pursue a West Coast integrated steel millStrategy

  Kaiser’s shipyards were paying high transportation costs for eastern steel while wartime demand strained national supply. A western mill could provide a regional source for shipbuilding and industrial customers.

  What changed. Kaiser proposed and incorporated a steel company, secured federal financing, and selected an inland site at Fontana under wartime government conditions.

  Aftermath. The decision created a major integrated steel operation in the American West and supported wartime ship production.

  Reconstruction Finance Corporation loan. 110 million US dollars (1942)

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• 1987Kaiser Steel liquidated

  The company was liquidated following its bankruptcy and the closure of its principal steelmaking operation.

  Bankruptcy
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• 1983Fontana steelworks closes

  Kaiser Steel shut the Fontana mill after a prolonged decline associated with foreign competition and difficulties affecting American integrated steel producers.

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• 1948Eagle Mountain Railroad completed

  Kaiser completed a company-owned rail line connecting its Eagle Mountain iron mine with the Southern Pacific network, improving raw-material access for Fontana.

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• 1943First Fontana steel plate produced

  The Fontana plant produced its first steel plate, supporting Pacific Coast shipbuilding during World War II.

  Product launch
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• 1942Fontana mill begins construction

  Construction began on Kaiser Steel’s inland integrated steel mill at Fontana, California, after federal wartime authorities approved the project and financing.

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• 1941Kaiser Steel incorporated in California

  Henry J. Kaiser incorporated Kaiser Steel Corporation as part of an effort to establish steel production near the West Coast shipbuilding industry.

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1. Kaiser Steel