Today, steel jobs are lost; what about tomorrow?

The International Trade Commission in Washington is sacrificing the U.S. steel industry on the altar of free trade, answering the prayers of U.S. automakers.
An industry that famously spends more on each car built for employee health coverage than for steel has managed to convince a compliant trade body that opening the U.S. market to underpriced steel from countries that subsidize production is a matter of fairness.
This is the same industry that 25 years ago prevailed upon the Reagan administration to crackdown on foreign car imports, a move that resulted in the construction of U.S. plants for the production of foreign nameplate vehicles.
Ironically, DaimlerChrysler AG, Ford Motor Co., General Motors Corp., Honda Motor Co., Nissan Motor Co. and Toyota Motor Corp. pursued the steel case together, a first for the competitors. The coalition points to the multinational nature of auto production today and portends a complicated and perhaps unhappy future for American auto production -- impending savings on steel notwithstanding.
DaimlerChrysler, for instance, appears convinced that it cannot profitably produce an entry level car for the American market in the United States. It's next generation small car may well be imported from China.
What will the reaction of the other automakers be to that development? China exported to the United States 202 billion more in products than it imported in 2005 because of obviously lower labor and environmental costs and because of its artificial depression of the value of the Chinese yuan against the dollar.
The next step
When cars start arriving on U.S. docks -- made in China of Chinese steel and glass and plastic and sold at a manipulated low price -- what will the reaction of the U.S. automakers be?
It's highly unlikely that Ford, GM, Honda, Nissan and Toyota will join together to ask the trade commission to offer them reasonable protection from DaimlerChrysler's Chinese car because all the multinational companies are working on their own deals in China. None will want to offend what is seen as a market with a growth potential unlike any other.
Eventually, the autoworkers in the United States whose jobs are now being "protected" by the trade commission's opening up of the steel market will find themselves in the same position as U.S. steelworkers: priced out of jobs.
Between 1997 to 2004, 45 steel manufacturers, about 40 percent of those operating in the United States, went bankrupt, the Associated Press reports. More than 85,000 jobs were lost. Of particular interest here: those jobs were lost in western Pennsylvania, West Virginia and Ohio, as well as Michigan, Indiana and Illinois.
We acknowledge that international trade is a complicated issue and that there is no easy or single answer to the potential for lost jobs in the United States. Rampant protectionism is not the answer, but neither is a mentality that places a higher premium on free trade than fair trade.
The automakers won a victory in Washington last week with the elimination of steel tariffs that had been in place for 13 years. But it was a victory with a cost. More U.S. steel companies will be filing for bankruptcy and more U.S. steelworkers will be losing their jobs.
The overall effect of that shakeout on the U.S. economy is uncertain. But one thing is clear: those steelworkers who are thrown out work won't be buying any new cars from anyone for a long time.