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Enron Mail |
Chris - I will forward the article to the steel distribution (jeff already
has it). I will distribute the steel study tomorrow when I receive it. Thanks, Lisa Chris Long 04/30/2001 10:07 AM To: Lisa Yoho/NA/Enron@Enron, Linda Robertson/NA/Enron@ENRON, Richard Shapiro/NA/Enron@Enron cc: Subject: Wall St. Journal-- Lisa - Please get this to Jeff McMahon and the steel group. Below are two press reports on the CITAC (the coalition we joined to fight 201) study on the effects of steel import quotas. We will use this as a basis for lobbying campaign over the next month. I will send you a copy of the study overnight. Thanks - Chris Look on p. A8 of the Wall St.Journal. Both articles are attached. April 30, 2001 <<...<< Economy Consuming Group Attacks Effort By Steelmakers to Curb Imports By ROBERT GUY MATTHEWS Staff Reporter of THE WALL STREET JOURNAL A grass-roots organization of consuming industries is mounting a campaign to stop the steel industry's relentless push to sharply limit the amount of cheap foreign steel allowed into the country, a move currently being considered by President Bush. Monday, the Consuming Industries Trade Action Coalition (www.citac-trade.org <http://www.citac-trade.org/< ) is expected to release a report that says that five times as many jobs will be lost in steel-consuming industries as would be saved in the steel-making industry if quotas are passed. The report also says that import limits would drive up the costs of steel and force steel users, such as those serving the household appliance, construction, automobile, machinery and equipment industry to lay off workers and cut production. "The thing to think about here is to look at when Washington is protecting the narrow interests of one industry, they don't always see the broader perspective," said Jon Jensen, chairman of Citac. But steelmakers and steel unions counter that the consuming industries have long enjoyed a period of extremely low steel prices and that it is unfair to expect the steel producers to continue to bear the brunt just to keep steel costs low. Hot-rolled and cold-rolled steel, two of the most widely used steel products, have seen their prices plunge to some of their lowest prices in decades at the same time consuming industries have been able to increase production, hire more employees and lower the costs of goods because of a rapid fall in steel prices. "We have in this country bad trade policy," says Leo Gerard, president of the United Steelworkers of America. "Clearly there are groups that are taking advantage of this unfair trade policy and we are mounting a campaign to stop this abuse." There has always been tension between the steel industry and the users of steel, with each side wanting the other to be less demanding about prices and supply. But the acrimony has increased in recent months as the steel industry suffers through a long string of quarterly losses eroding market share because of increased availability of foreign steel, which is often cheaper and seemingly endless in supply. In the past two years, about 20 steelmakers have filed for Chapter 11 bankruptcy-court protection. The steel industry has pushed for import quotas with its powerful steel lobbyists in Washington. Elected officials from steel-producing states have also turned up the heat for protections to the industry. The Bush administration has indicated that it would support a three- to five-year moratorium on foreign steel imports for many steel products that are domestically made, if the steel industry agrees to consolidate and reorganize in order to become more competitive both in the domestic and international markets. Feeling outpowered, the consuming industries, a loose band of mostly small, nonunion companies, including Stamco Industries Inc. of Euclid, Ohio, and All American Mfg. Co. of Los Angeles, formed Citac nearly two years ago to push their agenda and show that there are more users of steel than makers of steel. Absent from the group are big appliance makers and automotive customers, although those customers too are against allowing additional quotas on imports. The report says that if the most drastic of several import quota plans were to be implemented, about 3,700 steel jobs would be protected. But 19,000 to 32,000 jobs in the steel-consuming sectors would be lost. The report also says that the average pay for these lost steel consuming jobs is about $17 an hour. Keith Busse, chief executive officer of Steel Dynamics Inc., based in Butler, Ind., criticized the report and the effort to keep additional import quotas from becoming law. "It's ridiculous for these guys to want to continue to see the domestic steel industry to suffer. We depend on each other," he says. Write to Robert Guy Matthews at robertguy.matthews@wsj.com <mailto:robertguy.matthews@wsj.com< <<...<< Steel users assert quotas would cost jobs By Nancy E. Kelly WASHINGTON, April 30 -- Steel users struck a blow against agitated suppliers seeking import restraints on foreign steel by funding a study on job losses under several import policies. The report concluded that quotas would result in three times as many steel-consuming industry workers losing their jobs as would be protected in steel manufacturing. Funded by a foundation affiliate of the Consuming Industries Trade Action Coalition (CITAC), "Costs to American Consuming Industries of Steel Quotas and Taxes" was written by the Trade Partnership, a Washington research group. CITAC members include a number of large steel consumers and associations, including Caterpillar Inc., Toyota Motor Manufacturing North America Inc., Nissan North America Inc., the American Wire Producers Association, the International Association of Drilling Contractors, the Precision Metalforming Association and the American Institute for International Steel. The 30-page report, to be formally unveiled at a Washington press conference Monday, based its findings on a "state-of-the-art" econometric model to determine the costs to steel-using industries and consumers if the Steel Revitalization Act (H.R.808) were passed into law. The bill, backed by the United Steelworkers union, includes an import rollback to an average of levels between 1994 and 1997; an expansion of the $1-billion steel loan guarantee program to $10 billion; a 1.5-percent tax on all steel sold in the United States; and a grant incentive program for merged steel companies to maintain employment levels. The model also was used to determine the sole costs of quotas alone. According to its findings: * The steel bill would protect no more than 3,700 steel jobs in contrast to a loss of between 19,000 and 32,000 jobs in steel-consuming sectors. * Quotas outlined in the bill would cost tax consumers $1.35 billion to $2.89 billion annually, or $732,000 per job protected in the steel industry. * Quotas alone would result in two to three times as many workers in steel-consuming industries losing their jobs as would be protected upstream in the steel industry. * Quotas alone would cost consumers from $1.33 billion to $2.34 billion annually, or as much as $565,000 per steel job protected. Asked about the ultimate costs to consuming industries if the domestic steel industry was substantially reduced, Laura M. Baughman, who authored the study with Joseph F. Francois, said that CITAC wanted a healthy domestic steel industry. "CITAC is not for putting the domestic steel industry out of business, but they don't think import quotas are the answer," she said. "Imports are not the problem--other things are the problem." The study said that technology was driving the long-term change in the industry while the steel ranks had been blaming other factors, including imports. Asked why modern, efficient mini-mills like Nucor Corp. and Steel Dynamics Inc. also were citing imports as the cause of severe pricing declines, Baughman had no hard answer. "I find that very sad," she said. "These are companies that understand the value of imports to the U.S. economy and have relied on imports themselves for raw materials. I don't know." Baughman emphasized that the Trade Partnership had no political agenda and defended the model as rigorous and not easily manipulated. "It's a model that takes into account the entire economy and the effects on everything from agriculture to banking in a change on steel imports, using basic input and outputs," she said.
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