Three months after the U.S. government slapped tariffs on imported steel, suppliers of metal-formed auto parts are feeling punished.
Supplies are tight as steel production is constrained, and prices have jumped more than 20 percent to $320 a ton for the benchmark hot-rolled steel. Most of the steel used by auto plants in North America, both the Big 3 and those owned by foreign automakers, is made in North America. Hot rolled steel is used in truck frames, floor pans and brackets. Automakers have long-term contracts for themselves and key Tier 1 suppliers, and have buying power to offset shortages and price surges. But they show little inclination to help smaller suppliers or grant price increases unless a production line shutdown is imminent.
"A crisis is looming for the auto industry, but it is already a crisis for those (parts makers) that consume a lot of metal, said William Gaskin, president of the Precision Metal Association, a Cleveland-based association of 1,300 stamping and metal forming companies.
Automakers now are less fearful that steel supplies could be interrupted by the wave of bankruptcy court filings that swept the U.S. steel industry last year. But the tariffs have prompted bitter criticism from smaller steel users that President Bush's efforts to help one industry is causing pain among hundreds of smaller, steel consumers.