WASHINGTON - Automotive suppliers, who blame high steel costs for the deaths of decades-old members of the industry's supply chain, will keep pressing the Bush administration to roll back steel import tariffs.
Supplier leaders are not convinced that an expected World Trade Organization ruling, declaring the tariffs illegal, will bring relief fast enough. The administration likely will appeal the ruling after it is formalized next month.
Instead, suppliers are focused on a midterm review of the three-year tariff program set for September. They say that if the U.S. International Trade Commission examines the effects on steel users, it will find that the tariffs have done more harm than good.
Supplier executives, seeking support from a subcommittee of the powerful House Ways and Means Committee, made that point in a hearing Wednesday, March 26.
Wes Smith, owner of E&E Manufacturing Co. of Plymouth, Mich., which supplies heavy-gauge fasteners and other items to automakers, told the panel his main steel supplier broke a long-term contract with E&E to raise prices. The contract was broken in March 2002, the day after tariffs of as much as 30 percent were imposed.
"Our steel costs have increased an average of 34 percent, which amounts to $3.3 million," he testified. But his chief OEM customer, threatening to switch to overseas suppliers, demands that E&E cut its prices.
Timothy Leuliette, CEO of Metaldyne Inc., a supplier of components, assemblies and modules for chassis, engines and transmissions, said his company is getting some parts from South Korea rather than pay for higher-priced domestic steel for its U.S. factories.
Such moves are one reason Metaldyne has laid off about 3,000 of its 11,000 employees over the last two years. And while a company of Metaldyne's size has the option to get parts overseas, some smaller U.S. manufacturers have to close, he said.
"These jobs will never return to the U.S.," Leuliette testified.
One study for steel users blamed the tariffs - and alleged price gouging by some U.S. steel producers - for 200,000 lost jobs in the consuming industries, more jobs than are provided by U.S. steel companies.
Ways and Means Committee Chairman Bill Thomas, R-Calif., has done nearly all the committee can do to influence the trade commission. He has petitioned the commission to investigate the effects on consuming industries.
But tariff opponents believe events such as the hearing still are needed to increase pressure on the White House.
Also on hand were steel executives who argued that the tariffs are having the desired effect of keeping their companies afloat while the industry is consolidated. Charging tariff opponents with a "big lie" about lost jobs, the steel makers said early termination would put their companies in jeopardy again.