Recovery plan pleases WCI chiefs
One steel official argued the steel tariffs should have little effect on consumer prices.
THE VINDICATOR, YOUNGSTOWN
By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
WARREN -- WCI Steel officials were effusive in their praise of President Bush's steel tariff plan, saying it will give the beleaguered steel industry the breathing room it needs to recover from years of unfair import competition.
"We are extremely satisfied with the president's decision," said WCI president Edward R. Caine late Tuesday. "We are also grateful that President Bush is sending a message that American trade laws cannot be broken without violators' suffering the consequences."
Caine cautioned, however, that WCI and the steel industry in general won't be able to make a full recovery unless the national economy continues its upswing.
Based in Warren, WCI is the Mahoning Valley's only remaining integrated steel producer and the third-largest industrial employer in the tri-county area with a work force of 2,000.
The steelmaker has managed to survive a national steel crisis because it had a healthy line of credit and a large reserve fund, but it lost $100.8 million in its fiscal 2001, its first losing year since it started operations in 1988.
Bush's proposal: Company officials said the Bush plan would levy a 30 percent tariff on flat rolled steel product imports like those WCI makes. Tariffs on other steel product types range from 30 percent to as low as 8 percent.
WCI and other major steelmakers had been pushing for 40 percent tariffs, but spokesman Tim Roberts said they believe the 30 percent will have a major impact.
"We're relieved," he said, citing news reports earlier this week indicating Bush would limit the tariffs to 20 percent. Foreign traders would have probably been able to absorb a 20 percent tariff, he said.
WCI officials were also pleased to see that Russia will be included in the tariff. Russia is a major, cut-rate competitor in the flat-rolled steel business, he said, and there were news reports Monday that it would be exempted from the tariffs.
About price increases: Roberts disputed the claims of opponents lobbying against the steel tariffs who claim the efforts would result in major increases in the prices of consumer products containing steel.
He said the 30 percent tariff will likely result in a $50 price increase in an automobile, and a refrigerator would likely go up about $2.
"They're blowing smoke," he said, adding that steel industry insiders believe the opposition was mostly financed by the foreign steel producers.
The American Iron and Steel Institute, which is made up of 36 steelmakers and 149 other companies affiliated with the steel industry, also commended the Bush tariff plan.
"Against enormous opposition from foreign governments and others, the president has made a courageous decision in the national interest," said Andrew G. Sharkey III, AISI president and chief executive.
He said the plan will "be critical in helping to return the American steel industry to a position of health," and complies fully with World Trade Organization requirements as well.
Praise: Gov. Bob Taft praised the president for imposing what he called "a strong set of remedies to balance the needs of the steel industry with the needs of steel consumers."
The governor was among steel supporters who testified before the U.S. International Trade Commission in September to explain how the state's steel industry had been damaged by discount-priced imports. He said he believes Bush's tariff plan will help curb illegally subsidized steel imports.
U.S. Sens. Mike DeWine and George V. Voinovich, both Ohio Republicans, said they applaud Bush's efforts to help the beleaguered steel industry and argued that the Clinton administration was less responsive.
Voinovich noted that Bush exceeded the International Trade Commission's recommendations, despite pressure to reject the group's study.
DeWine said he had been pushing for higher tariffs than the Bush plan allows, but he likes the way the administration paired tariffs with efforts to reach agreements with other countries to limit steel production worldwide.
vinarsky@vindy.com