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TESTIMONY OF
MICHAEL TANNER, PRESIDENT
WREN INDUSTRIES, INC.
HEARING ON UNINTENDED CONSEQUENCES OF
INCREASED STEEL TARIFFS ON AMERICAN MANUFACTURERS
BEFORE THE
HOUSE COMMITTEE ON SMALL BUSINESS
July 23, 2002
My name is Michael Tanner, and I am President at Wren Industries.
Thank you very much for inviting me to speak at this hearing about
the unintended consequences of increased steel tariffs on American
manufacturers.
I am here because the steel tariffs imposed by the President in
March have increased the price and reduced the availability of steel
in the market to the point that our supply of steel is not reliable.
Without a reliable supply of steel, we cannot continue to operate.
Wren is a metal stamper located in Tipp City, Ohio. We are a tier
1 and tier 2 supplier of parts for the automotive industry. We employ
over 200 workers and have been in business since 1977.
The steel tariffs imposed by the President in March have reduced
the availability of steel in the market to the point that our supply
of steel is not reliable. Wren's service center suppliers have been
placed on allocation and the steel deliveries that we are able to
secure have been arriving a month or two late. This causes additional
manufacturing time, which means additional manufacturing cost. Plus,
on several occasions, I hate to admit how close we have come to
shutting down our customer's production lines, which would be catastrophic
for our reputation and credibility as well as incurring substantial
penalty charges - all because we could not get the steel we need
on time. I have no assurance of steel supplies past September of
this year.
In addition, several of our service center suppliers have breached
existing contracts with us. For example, our service center provider
that supplies 25% of our steel requirements increased the price
of delivered steel by as much as 48 percent despite our contract.
We had relied on these contracts with our suppliers, and based our
pricing to our own customers accordingly. My customers will not
pay the increased prices I am now being forced to pay for steel.
Ladies and Gentlemen of the Committee, the bottom line is that
my business is in danger if I cannot get steel and must continue
to pay the increased prices. Unless things change rapidly, my company
will lose business to foreign competition, now that our international
competitors have a built-in cost advantage and a ready supply of
steel.
Wren is a small business. We operate on the tight margins in a
very competitive market. We can't pass on any of our increased costs
to our customers. If there is no relief in the pricing of steel,
I don't know how our business will be able to survive beyond the
end of this year. We are in these dire straits due to the operation
of the Steel 201 tariffs.
Thank you for your time.
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