Dispatches Industrial Flea Market

By JEFFERY C. RUBIN, in Fontana, California

"These foundations are a wonder to behold," says George Trentz wistfully as he stands before a row of crumbling concrete walls, virtually all that remains of the former Kaiser Steel Corp.'s mill in this town, an hour's drive east of Los Angeles. The plant, once 20 stories high and 100 yds. long, has been reduced to a ruin, and as workers with acetylene torches continue their cutting, Trentz watches the factory where he worked for years literally disappear before his eyes. If it were simply another smokestack victim of America's decline in manufacturing, it would just be allowed to sit and rust. Something stranger is happening, though: the plant has been sold to the Chinese, and they are taking it apart rivet by rivet and shipping it back to . their country, where they will rebuild it to help satisfy China's insatiable industrial appetite. Thought to have expanded at a torrid rate of 13% in 1993, China's economy has been the fastest growing in the world for two years in a row.

Looking at the piles of rubble and scrap, it is hard to imagine that when it opened in 1978, the Basic Oxygen Process Shop No. 2, known as "the BOP shop," was among the most formidable steelmaking facilities in the world. The two huge Voest-Alpine furnaces could produce up to 2.8 million tons of high- grade carbon steel annually. But soon after Kaiser built the plant (at a cost of $287 million), the company encountered new environmental regulations and rapidly rising union wages that made the mill noncompetitive with overseas producers. Within five years Kaiser shut the plant down. For a decade the BOP shop came to life only occasionally as a movie set -- in 1990, for example, the finale of Arnold Schwarzenegger's apocalyptic Terminator II was filmed here.

Then, in late 1992, the Shougang steel corporation of Beijing agreed to pay $15 million for the plant. Soon after, 290 engineers and laborers arrived from China to begin packing up their new possession. After being cut or unbolted, each piece -- some are bigger than a boxcar -- is numbered and labeled in Chinese characters to ensure that the 60,000-ton jigsaw puzzle can be reassembled correctly back home in China. The furnaces now hang oddly in the open air, but within weeks they will be lifted from their cradles and made ready for transport to the port at Long Beach.

"China could build a new steel mill like this one," says Wang Shengli, who is overseeing the project. "We bought this one because we can have it operating sooner than if we built our own." The mill will be put up in the southern Guangxi region; the cost of dismantling, moving and reconstructing it will be at least $400 million.

The Fontana mill is the largest plant bought in the U.S. and taken home by the Chinese, but it is hardly the only one. In North Carolina the Chinese picked up a secondhand nuclear-plant control room, in Pennsylvania they purchased a used microchip-making facility, and in Michigan they bought an auto-engine assembly line. If China's economy keeps going along as it has been, the steel, microchips and engines made in these newly exported plants may ironically come back to America one day -- as imports.