TESTIMONY OF
Jennifer Johns Friel
Mid - West Fabricating Company
Hearing Before The
House Committee On Small Businesses
"Lost Jobs; More Imports — The Unintended Consequences
of Steel Tariffs"
September 25, 2002
Thank you for inviting me to participate in this
hearing. My name is Jennifer Johns Friel. I am President of Mid
West Fabricating Company. Mid West Fabricating is a leader in
the cold forming of steel wire into special fasteners and rods
for automotive and lawn and garden customers, as well as a magnitude
of components for various industrial and consumer products including
appliance, highway and housing construction. Mid West Fabricating
Company is a family owned corporation that was started in 1945.
We are headquartered in Amanda, Ohio, but we also have plants
in Lancaster Ohio, and Santa Fe Springs, California. We have approximately
260 families that rely on Mid West for their employment.
My company has been adversely affected by the Section
201 tariffs on steel even though we only buy from North American
steel producers. We process an average of 20 million pounds of
steel each year. The bulk of that steel is Industrial Quality
Rod, a lower quality steel. The steel tariffs have prompted our
suppliers to dramatically increase the pricing of this material,
and extend the delivery times from historic four to six week lead
times to upwards of 12 and even 14 weeks. The 201 remedies have
caused tremendous dislocations in the market that have affected
my ability to get the steel I need at a reasonable price. It is
very difficult for my company to operate under these conditions.
Our customers will not consider price increases, do not give us
firm schedules 12 to 14 weeks in advance and therefore we are
not certain that we are purchasing enough material to meet their
future demands.
Here is one example of the problems we are facing
as a direct result of the steel remedies. Our steel supplier pushed
back a quoted lead-time an additional three weeks. Since we owed
parts to an assembly line that could not wait an additional three
weeks for parts, we were forced to purchase material on the spot
market from a supplier we consider to be sub-standard. Half of
the material we purchased turned out to be defective, resulting
in contaminated material throughout our supply chain. Sorting,
evaluation and containment costs associated with this event caused
us to lose substantial money on this shipment. Obviously we don't
want to, and can't afford to, repeat this situation.
It is very difficult to run a business when you
have no assurance that you will be able to obtain the raw material
you need. While we are doing everything we can to obtain the steel
we need, we are concerned that lack of steel will mean that we
are not able to supply particular orders.
The pricing and delivery environment that has developed
in the wake of the Section 201 decision is also of concern to
our customers. After the steel tariffs were put into effect, one
of our long-standing customers placed a huge order with a Canadian
supplier, instead of with us, because the customer was concerned
that we would not be able to get the steel we needed. The order
that we lost was worth five million dollars per year for eight
years. We are a twenty-five million dollar company. This order
would have been very important to us, and the people who work
for us. It will be very difficult to recover this lost business.
This particular part will have a life span of approximately eight
years. We will not have a chance to recapture that business until
the next redesign - eight more years. Therefore, the steel tariffs
will continue to have a negative impact on our business long after
the tariffs are lifted.
The steel tariffs have clearly harmed many downstream
consuming industries. The negative impact is spreading far beyond
what could have been anticipated--even into small businesses such
as mine. Please help me, and the people who work with me, by lifting
these tariffs as soon as possible.
Thank you.
