Are the Once Golden Geese Dying?
02/13/2002
The Wall Street Journal
To The Editor:
Mr. Usher describes steel market "realities and consequences"
as he sees them. But the restructuring plan he and other steel
executives advocate does not consider the consequences their plan
would have on the rest of the U.S. economy and especially on their
own customers, the steel -using industries of America.
Mr. Usher argues that if no protection is granted on steel imports
, "America might lose" this industry, with serious consequences
for national security and the economy. With a competitive and
thriving mini-mill sector and several viable integrated producers
(including U.S. Steel ), there is no danger of the U.S. steel
industry disappearing. In addition, a recent Department of Commerce
investigation made it clear that there is no risk to national
security from current steel market conditions. On the other hand,
import restrictions threaten to harm more than 100,000 domestic
steel -using businesses and their 12.8 million employees, not
to mention their families and communities. If tariffs on steel
are imposed, every single state in the U.S. would lose more jobs
than could be maintained through protectionism.
Nor can we agree with Mr. Usher that U.S. trade laws should
be more energetically enforced; 50% of all current steel imports
to the U.S. are covered by antidumping or countervailing duty
orders. True market forces have not been allowed to function in
steel trade for some time and the U.S. steel industry should acknowledge
that it has had protection for most of the last 30 years. The
industry will never be competitive if it does not compete.
Now that government and the industry have both acknowledged
that consolidation is necessary for U.S. integrated producers
to be healthy and competitive, and that legacy cost relief would
make that rationalization possible, steel import restraints should
be off the table. It is financially impossible for most steel
-using companies, which are small, to pay higher prices for steel
for the sake of a few integrated producers. Protection will drive
many steel using businesses off shore, and many others into bankruptcy.
Jim Zawacki
President
GR Spring & Stamping
