Steel rivals join in call for tariffs

U.S. Steel, Nucor chiefs team with union, Rockefeller

Senate hearing is platform

It's `crunch time' for the president, West Virginian says

February 14, 2002|By Kristine Henry | Kristine Henry,SUN STAFF

WASHINGTON - Executives from competing steel companies stood shoulder to shoulder yesterday with a top union official and Sen. Jay Rockefeller in their push for President Bush to impose 40 percent tariffs on imported steel.

The fate of the American steel industry is in "the cup of the hands of the president of the United States," the West Virginia Democrat said yesterday prior to a Senate committee hearing on tariffs.

Imported steel that has been flowing freely into the United States has helped drive down prices and has in part lead to dozens of steel makers filing for bankruptcy protection over the past several years.

Bush has until March 6 to act on a package of recommendations from the International Trade Commission, which determined that U.S. steel makers have been harmed by imports.

"This is really crunch time" for Bush, Rockefeller said, "and if he thinks this is some obscure subject that will not be noticed, he is wrong."

The White House, under pressure from steel users not to impose penalties that will raise prices on the raw materials they buy, is said to be considering a package of quotas and tariffs weaker than what the steel industry and its supporters are demanding.

Thomas J. Usher, the head of United States Steel Corp. who has been spearheading a drive to consolidate the U.S. steel industry, joined Rockefeller at the news conference and later testified before the Senate Finance Committee.

Usher said the domestic industry does not support remedy proposals that include tariff-rate quotas, which would allow a certain amount of foreign steel to be imported duty free before imposing some level of tariff.

"They would offer no real relief to the domestic industry - and could very well do more harm than good," he said.

Steel makers say imposing substantial tariffs is critical not just because they would boost steel prices and discourage foreign competition. Usher and Rockefeller also want to use revenue to aid the effort to consolidate the industry.

U.S. Steel has a tentative agreement to buy the bankrupt Bethlehem Steel Corp. and several other steel makers, but says the deal is contingent on the federal government assuming those companies' retiree health care costs. It's a tab of about $12 billion that has until now made acquiring these companies unattractive to potential buyers.(Bethlehem's chief executive, Robert S. Miller Jr., has compared it to trying to unload a $100,000 house that has a $200,000 mortgage -- you can't give it away.)

Bethlehem, which employs about 3,500 at its Sparrows Point plant in Baltimore County, filed for Chapter 11 protection Oct. 15, listing $4.2 billion in assets and $6.75 billion in liabilities, including an unfunded health care obligation of nearly $3 billion and a pension fund that is short $1.85 billion.

"I cannot overemphasize the importance of this moment," Usher said yesterday. "The health of the American steel industry and the jobs of thousands of steel workers are at stake."

Joining Usher and Rockefeller yesterday in urging Bush to impose high tariffs were Dan DiMicco, president and chief executive of Nucor Corp., and Leo Gerard, president of the United Steelworkers of America.

Gerard said he thinks that even tariffs of 40 percent are too low but he has agreed to "rally around" that number.

A coalition of the union and steel producers is also launching a series of television, radio and print advertisements urging Bush to support strong tariffs.

While the union has generally been supportive of using tariff-derived funds to help bring about consolidation - with the caveat that it wants to preserve as many jobs as possible - DiMicco is not on board with the plan.

Nucor, a so-called mini-mill that makes steel from scrap rather than raw materials, uses nonunion labor. While its competitors have been bleeding funds - Bethlehem lost $1.95 billion in 2001 and U.S. Steel lost $218 million - Nucor had a profit of $113 million last year.

Nucor has condemned the appeal by U.S. Steel and Bethlehem for government assistance, but DiMicco joined yesterday in calling for import relief.

His message to Bush, DiMicco said: "Let's roll; it's time to roll."

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