Congressional Steel Caucus Hearing Airs Real Dangers

Representative Peter J. Visclosky (D-IN) and Vice Chairman of the Congressional Steel Caucus said, "The domestic steel industry has been caused irreparable harm by foreign nations that dump illegal steel into our markets."

With that in mind, the Congressional Steel Caucus met in Washington, DC on June 16 and listened to testimony from steel industry leaders that included spokespersons covering the entire gamut of the industry. Fourteen leaders from the U.S. steel industry including members of company management, from the workforce, and from steel industry trade organizations spoke out about the challenges faced by the industry and the economic and national security consequences should the challenges not be met.

According to Thomas Gibson, President and CEO of the American Iron and Steel Institute that represents 24 member companies in North America, there were approximately 165,000 jobs U.S. jobs in the steel industry prior to the economic downturn. He also stated that the U.S steel industry supported over 1 million jobs overall. This combination contributed $350 billion to the U.S economy annually. With the utilization of steel making capacity below 50%, jobs and economic contribution follows. Richard McCormick, of Manufacturing and Technology News, pointed to the disturbing fact that right now there are "...more people unemployed than work in American Manufacturing companies."

Witnesses repeated over and over that the number one cause for the downturn of domestic steel production (down over 50% from last year) is the glut of dumped steel products being exported to the United States. Dumping, the selling steel at prices below the actual cost of production, is possible only when a government pays subsidies to the produce the steel.

Several witnesses, including Thomas A. Danjczek, President of the Steel Manufacturers Association (SMA) and Jim Robinson, Director, District 7 of the United Steelworkers (USW) testified that the most effective solution to dumping is to enforce trade laws already enacted. An additional tool available to ease the dumping is use of the "Buy American" programs already part of bills making their way through Congress and bills already passed and signed into law. Agreement seemed unanimous with Mr. Robinson's statement that, "We must be vigilant, quick to respond, and steadfast in protecting our rights."

Transportation was another issue identified as a challenge to the steel industry. Lagging sales of automobiles and trucks by automakers such as General Motors mean less steel bought to produce them. But it wasn't just the automotive industry that was highlighted. Witnesses called on Congress to push ahead with infrastructure projects such as highways, waterways, rail and other portions of the infrastructure. This is where the "trickle down" theory really works; fund the research and projects for immediate creation of jobs to do the work. Purchasing the materials such as steel, necessary to accomplish the projects brings jobs back on line, and all of this creates the revenue required by the communities in which we live.

The third major challenge the steel industry faces is clean energy. Producing steel is an energy intensive process whether the energy used is feeding the electric arc furnaces of minimills or the coal to coke iron smelting process combined with the actual production of steel from the molten iron used by integrated steel producers. Witnesses testified that in spite of handicaps levied by Congress concerning environmental concerns, the U.S steel industry has made more headway reducing its carbon footprint than any other sector of American business. "...if every sector of the U.S economy had achieved this level of energy improvement (made by the U.S. steel industry) the U.S would have exceeded the targets of the Kyoto protocol" said Ronald Krupitzer, AISI

Besides the painfully obvious loss of jobs and loss of revenue in so many communities, and the loss of cost-savings created by American efficiency in the steel industry, Representative Visclosky concluded by saying, "If American steel production is diminished by this ongoing threat, the Department of Defense will no longer be able to ensure our national security by maintaining a sufficient steel supply to defend our nation with domestically produced tanks, ships, and submarines."