Automakers and their key suppliers are being shortsighted when they summarily dismiss price increase requests from smaller suppliers that are being squeezed by the dramatic rise in steel prices.
The reality is that automakers will either pay more for steel now by granting some relief for stamping companies, or they'll pay much more later if a small but critical supplier shuts its doors and an assembly line comes to a screeching halt.
No one in the auto industry overtly encouraged President Bush as he crafted the ill-advised list of tariffs on imported steel that was implemented on March 20.
The vast majority of steel used by automakers here - in plants owned by the Big 3 and plants owned by foreign-based automakers - is produced in the United States.
While the Bush tariffs do not apply directly to the steel used by automakers and suppliers, the auto industry is taking a hit. Domestic steel producers, reaping a windfall from tight supplies and Bush's manipulation of the market, have raised the price of domestically produced hot-rolled steel - which is used in floor pans, truck frames and brackets - by more than 20 percent since last March to $320 a ton.
Years of brutal cost-cutting in the auto industry have left suppliers with no margin for error, which makes a big problem out of even small changes in the cost of materials.
The Bush administration fanned the flames of a global trade war with the steel tariffs and is now trying to contain the trouble by granting exemptions.
Automakers must do their part. They have purchasing clout in the steel market. They should use that power to get price breaks for their stamping suppliers, or give them price increases to keep assembly lines running smoothly. The alternative is to pay more later and scramble to fix a problem.