Limiting steel imports divides industry

Free trade
Some U.S. steel users make these arguments against steel import curbs.
  • U.S. steel producers meet
    only 75% to 80% of demand.
  • Some kinds of steel are not made in the United States.
  • Each U.S. steel production job saved would kill 9 jobs at steel parts makers.
    Source: Consuming Industries Trade Action Coalition

  • WASHINGTON - Brake-parts business owner Bill Sopko says a Bush administration plan to restrict steel imports threatens the survival of companies such as his.

    Sopko is CEO of Stamco Industries of Euclid, Ohio, which makes brake parts for cars and trucks. He told the International Trade Commission that steel imports are essential to his customers, mostly Tier 1 suppliers to automakers.

    "If we don't meet those needs, someone else will. And we will be out of business," Sopko said.

    Sopko said some steel he uses is available only from overseas mills. But he added that imports are needed to moderate prices and keep his products competitive with brake parts made overseas.

    Presidential request

    President Bush, heeding the call of steel companies based in the United States and their friends in Congress, asked the commission in June to investigate the harm imported steel may be doing to domestic producers.

    The investigation is a prelude to limits or duties likely to be placed on imported steel by early next year.

    Steel companies based in the United States say they need protection from the imported steel that is being dumped in the American market or they won't survive.

    About 20 of them already are in bankruptcy court.

    U.S. steel makers say imports have depressed inflation-adjusted steel prices to levels 33 percent lower than in 1982.

    But in commission hearings, which opened Sept. 17 and continue at least until Friday, Oct. 5, steel users are arguing that far more harm may be done to their companies and employees if steel imports are restricted.

    Steel users employ 57 times as many people as steel producers in the United States, according to the Consuming Industries Trade Action Coalition, one of the biggest groups opposing import restrictions.

    Among coalition members are Nissan North America Inc., Toyota Motor Manufacturing North America Inc. and the Association of International Automobile Manufacturers - as well as smaller companies such as Stamco.

    Taking no stand

    The Big 3, meanwhile, are awkwardly sitting on the sidelines of the commission investigation.

    They say they are taking no position despite these facts: They are proponents of free trade. They are big steel users. They are cost-conscious companies, and restrictions on imports would no doubt raise prices of all steel in the United States.

    General Motors spokesman Bill Noack said his company is concerned about "any action that would raise consumer prices of our vehicles" but is not notifying the commission of its concern.

    Ford Motor Co. spokeswoman Ellen Dickson said, "It's just not on our radar screen."

    Stuart Schorr of DaimlerChrysler said, "We're not going to get involved in the issue. Our position has not changed."

    Don't rile labor

    Others close to the automakers say the Big 3 decided to lie low because they don't want to offend organized labor, their U.S. steel suppliers and the many members of Congress who favor restrictions on steel imports.

    Meanwhile, Sopko of Stamco Industries elaborated on the reasons he and others like him view the issue with more alarm.

    If restrictions on imports raise the cost of steel, including domestic steel, he said he will have to boost his prices to his customers.

    In many if not all cases, he said, the customers can choose to get brake parts from overseas companies, thereby avoiding the higher cost of raw steel.

    Sopko told the commission: "Imports are not optional but essential for my company."

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