Rebounding steel mills strengthen Obama's case Sparks are flying again at Specialty Fab, an Ohio steel manufacturer, and President Barack Obama hopes similar successes in the industrial heartland of this politically crucial state can ignite his reelection campaign. Back in 2008 and 2009, the US economic crisis forced David Hughes, president of Specialty Fab, to go into survival mode -- much like others in the region's battered steel and auto industries. The payroll at his plant, housed in a low, brown set of hangars in the old mill community of North Lima, dropped from about 40 employees to just 10. Much of the machinery, which turns out giant tongs used in steel factories, pipes, and other hardware, fell silent. "The workload around here was very slow," Hughes, 61, said, "as slow as people had seen in 35, 40 years." Today Specialty Fab has reawakened. On a visit Thursday, workers could be seen grinding, machining and welding, the air filled with smoke, red sparks and the intense, bluish light of welding torches. The screeching noise of the grinders at work could only be music to Obama's ears. Ohio is a key battleground in any presidential election, and for Obama's eventual Republican rival it is likely a must-win state. So the White House is eager for stories like the revival of Specialty Fab. The Obama narrative is that his $787 billion stimulus package at the start of 2009 saved big industries, particularly steel and auto manufacturing, from total collapse and prepared the ground for today's recovery. Republicans counter that the stimulus policy poured good money after bad and did little to create any measurable results, while distorting an already sick economy. A "disaster," Republican frontrunner Mitt Romney has said. Obama points to examples of the way he says his stimulus package helped hasten the end of the recession. Last year he visited Youngstown, near North Lima, to celebrate the $650 million expansion of a mill owned by France's V&M Star. Part of the reason V&M decided on the splurge was a $20 million sweetener provided by the state -- using federal stimulus money -- to prepare the infrastructure. Another major beneficiary of federal largesse in the area was General Motors, which in a dramatic turnaround last year restored full hiring at its Lordstown plant. That things have brightened in this gritty corner of Ohio is undeniable: unemployment has dropped to eight percent from double digits during the recession. "For the first time in 30 years our unemployment rate in this area is below the state and national average," Eric Planey, at the Youngstown Chamber of Commerce. In fact, if people like Hughes, who started Specialty Fab as a three-employee business in 1994, have a problem, it's this: there might not be enough skilled youngsters to fill the growing number of positions. "We need to make sure that we have enough young people who can do the jobs," he said. It's a good problem to have, but it's still a problem. Whether Obama should pat himself on the back, however, remains in dispute. Many believe the real driver to success here is not federal help, but a suddenly burgeoning oil and gas industry in the Marcellus shale formation in the hills just to the east. Booming rates of extraction and big energy-style investments are creating hot demand for steel tubes and other equipment. Planey said "a large part" of recent economic improvements were linked to the natural gas boom. The expanded V&M plant, for example, will supply steel tubing to the energy companies. Professor John Russo, from Youngstown State University, said the area is happy to emerge from a "devastating" recession, but he's not convinced the progress is for real. "In the last year or so, there's been an uptick of jobs in the area, largely because of the return of workers to the General Motors plant, because of the stimulus package that helped General Motors survive the bankruptcy," he said. It also benefited from the government spending in terms of luring and building the new mill here. But "the number of jobs created can't offset the number of jobs lost," he added. Perhaps worse, "the industries that are coming here, especially the oil and gas industry, are known as being very episodic and not long lasting."