YOUNGSTOWN Diamond Sparkler to get $1.6M from tariffs on Chinese
The Youngstown company keeps making sparklers despite losses of $1.4 million since 1995.
By DON SHILLING
VINDICATOR BUSINESS EDITOR
YOUNGSTOWN -- A downtown sparkler manufacturer has been awarded $1.6 million from tariffs imposed on Chinese sparklers imported to this country.
Diamond Sparkler, which says it is the last American sparkler manufacturer, will use the money to improve equipment at the plant and cover losses it has incurred from trying to keep its prices low enough to match the illegal Chinese imports, a company official said.
Diamond is owned by B.J. Alan Co., which operates the sparkler plant and a fireworks warehouse on Martin Luther King Boulevard.
Result of new law: Diamond was told two weeks ago that the payment would be coming from the federal government because of a new law that was passed by Congress. The law requires the government to turn over the punitive duty money it collects on foreign products.
Penalties are imposed after the U.S. International Trade Commission finds that U.S. industries are being harmed by unfair foreign competition.
Usually this involves dumping, a process by which foreign governments support companies financially so they can sell their products for less than it costs to make them.
The U.S. government has been imposing a 94 percent import tax on wire sparklers made in China since 1991.
Selling at a loss: Even with the tax, the Chinese manufacturers still are able to sell their sparklers at such low prices that Diamond is forced to sell its sparklers at a loss, said William Weimer, general counsel for B.J. Alan.
Diamond has lost $1.4 million since 1995 and a higher amount going back to 1991, he said.
The losses have come even though no payroll or expenses for the B.J. Alan's senior management are charged to Diamond, he said.
Diamond had applied for $3.5 million in reimbursement.
Weimer said B.J. Alan continued to make sparklers despite the losses at Diamond to ensure a supply of sparklers for its stores and stands. Most fireworks shoppers, even those seeking the most dazzling displays, throw in some sparklers for their family to use, he said.
B.J. Alan's retail fireworks stores sell a pack of 72 8-inch sparklers for $6.99.
The company operates 30 fireworks stores and hundreds of temporary fireworks stands across the country.
Diamond employs 18 full-time workers throughout the year and about 20 more during its peak season.
B.J. Alan employs a total of 125 full-time workers downtown throughout the year and between 300 and 350 in peak season.
shilling@vindy.com