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Guest Commentary February 27, 2002
Steel Industry In Crisis
The Honorable Barbara Mikulski
There is a crisis in America's steel industry. The next few weeks will determine the fate and future of that industry and, I believe, the fate and future of our steelworkers today and our retired steelworkers.
I commend President Bush for initiating the section 201 investigation on steel. That means an investigation by the International Trade Commission on whether or not we are facing unfair dumping. I am now calling on the President to impose an effective remedy; that is, a remedy of 40-percent tariffs across the board on steel.
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Since 1997, 31 steel companies have gone bankrupt, putting at risk over 62,000 jobs. Why is this? It is exactly what the International Trade Commission found: Subsidized foreign steel companies dump their excess products on the United States market at below market prices. They come into the United States and flood us with their imports at fire sale prices.
In response to this unprecedented crisis, President Bush did take an important step of initiating an investigation under section 201 of the trade act. The ITC unanimously found that these imports have caused serious harm to the American steel industry. Now the President has to act before tens of thousands more jobs are lost and retirees face the threat to their pensions and their health care. He must take meaningful action, not just some half measure that doesn't meet the challenge of the crisis.
Steel is in crisis. Last year, 17 steel companies filed for bankruptcy protection, 14 steel mills shut down, and nearly 30,000 workers lost their jobs.
Why does steel matter? This is not nostalgia for our industrial past. This is about our national and our economic security.
If we are worried about dependence on foreign oil, we should certainly be worried about dependence on foreign steel. We need steel to build America, whether it is our bridges or our automobiles, and also for our national security. In my own home State of Maryland, Bethlehem Steel made the steel plate to repair the U.S.S. Cole. It is American steel that is building Navy ships, Navy subs, American planes, the kind of steel we need for those bunker-buster bombs we need.
Are we going to rely upon Russia, China, and other countries and be steel dependent? I don't think we should do that. ...
What caused this crisis? Is it because American steel was inefficient, because the unions wouldn't cooperate with management, because we didn't use new technologies or new processes? Absolutely not. The reason American steel is in such dire straits is unfair trade. Foreign steel companies, subsidized by their government, dump excess steel in our market at those fire sale prices.
The United States of America does not have excess capacity. The United States and Canada have been net importers of steel. If you want to look at examples of these subsidies, let me give you one: Russia. This comes from the Bloomberg Business Report. ...The Bloomberg Report last week talked about how the Russian Government keeps 1,000 unprofitable steel plants open through Russian subsidies. That is not 1,000 workers; that is 1,000 steel plants. Because of those subsidies, they are able to stay in operation.
How can we compete with Russian subsidies where they have comrade health care, all their health care is paid for, they get subsidies in steel, and at the same time we are expected to compete?
What is the solution? We need a level playing field by reducing excess steel capacity abroad.
The way we also send them a message to stop the dumping is by imposing a 40-percent tariff. That would level the playing field. Half measures will not do. We need that 40-percent tariff and we need it without exception. The effects will last much longer than the 3 or 4 years because America's steel industry will have a chance to get back on its feet.
America's steel industry is the best in the world and I can't emphasize how competitive we are. It is the most efficient, uses the fewest man-hours available per ton, thanks to our steelworkers making the best use of technology and a willingness to cooperate with management. It is also the most environmentally sound, producing less emissions on steel produced.
Do you think those 1,000 Russian steel mills are going to be environmentally sensitive and OSHA compliant? I don't think so. American steel companies have invested over $20 billion in new technology to achieve these efficiencies. American steelworkers have made painful concessions in wages and benefits so that the industry would be efficient and competitive and would have a future.
The President must act now. The next few weeks will determine the fate and future of the steel industry. There is a March 6 deadline for a remedying decision, the tariff decision. The President has the authority. We want him now to have the will. We want him to impose this 40-percent tariff, give American steel mills a future and, most of all, protect the United States of America against dependence on foreign steel. Steel built our Nation; steel will continue to build our Nation, and most of all, steel will help us protect our Nation.
Barbara Mikulski, a Democrat, is a U.S. Senator from Maryland. The above column has been adapted from a speech Sen. Mikulski delivered on the floor of the Senate, February 27, 2002. To contact her, Click Here.
The above column has been distributed by PoliticsOL.com.
