Coalition urges Bush to end steel tariffs

Two dozen members of the Automotive Coalition on Steel Tariffs yesterday met with the White House and various departments, detailing extensive damage done by steel tariffs to manufacturers of automotive parts and components, and urging repeal of the tariffs. The U.S. automotive parts industry has been one of the hardest hit industries by the tariffs, according to the International Trade Commission (ITC) report that was released on September 19."We believe that the Bush Administration is listening to our concerns about the economic harm caused by the steel tariffs and we are optimistic that something is going to be done about the tariffs," said Larry Yost, Chairman of the Board & Chief Executive Officer of ArvinMeritor, Inc.In a morning briefing at the U.S. Capitol, which was moderated by Rep. Joe Knollenberg (R-MI), members of the Coalition gave specific examples of job losses and lost business as a result of the steel tariffs, personalizing data already reported in the ITC study on the impact of the tariffs on steel consumers. The study found that nearly three-fourths of automotive parts and component manufacturers surveyed reported changes in contract prices for steel, 87 percent of automotive products manufacturers reported that U.S. steel prices were higher than global prices, and 31 percent reported that their customers were now buying finished parts or assemblies overseas."The fact is that the real 'unintended consequences' of the steel tariffs is that the United States is exporting jobs overseas," Yost said. "Tariffs had an impact on all steel supplied in the U.S. ArvinMeritor buys 95% of its steel from domestic sources. When the tariffs were put into place, we suffered from price hikes, broken contracts and longer lead times. We cannot pass the price hikes along to our customers. We had no choice but to close our plant in Gordonsville, Tennessee, and to lay off many employees in Pulaski, Tennessee, resulting in the loss of 400 jobs. Unfortunately, these jobs are gone for good and are not coming back."Larry Denton, president and CEO of DURA Automotive Systems, which has 26 plants in the U.S., said the price of steel spiked 26% when the tariffs were put in place and are now up 10% over pre-tariff levels. "We supply automotive jacks to 50 or 60 customers in the U.S. About 76% of the cost is steel components," stated Denton. "Our workers can compete with any other workers in the world, but we cannot absorb a 26% price hike on an input that is three-quarters of our costs. We have no choice but to look overseas, putting hundreds of union jobs at risk."Said Ramzi Hermiz, Vice President, Global Supply Chain Management, of Federal Mogul Corporation, which employs 20,000 workers in the United States: "Steel is 70% of costs in our products. We bought 96% of our steel from domestic sources prior to the tariffs. Now we are moving some of our tools and products manufacturing plants to other countries to stay competitive."