Bost, Dunstan testify at Washington hearing on steel industry

 

From Illinois Business Journal news services

WASHINGTON, D.C.— Rep. Mike Bost, R-Murphysboro, and two others from Southern Illinois testified today before a joint hearing of U.S. Department of Commerce and the Office of the U.S. Trade Representative in Washington, D.C., on issues impacting America’s steel industry.

Also testifying today were Dan Simmons, president of United Steelworkers Local 1899 in Granite City, and Madison County Board Chairman Alan Dunstan.

“It’s critically important that the Department of Commerce and the U.S. Trade Representative understand our concerns about unfair trade and the impact it’s having on Southern Illinois steel jobs,” said Bost. “Steel production has always faced ups and downs, but today’s market conditions are among the worst in years. The government now has the tools it needs to fight illegally-traded steel imports. I am hopeful today’s testimony from our local officials and our steelworkers themselves will demonstrate the importance of trade enforcement to the federal government.”

Bost’s testimony follows (Dunstan’s testimony appears below):

“Thank you for holding today’s hearings. I appreciate the opportunity to discuss a very important discussion that hits home for many families in my district.

“I’ll be brief so you can hear directly from those impacted by the steel crisis – local officials and the steelworkers themselves.

“Steel production has always faced ups and downs, but today’s market conditions are the worst in years. Today’s crisis isn’t just about supply and demand. There’s less drilling … more regulations … and higher production costs.

“But let’s not forget one of the main causes of this crisis comes from overseas – with the non-market policies of competitors like China. These policies have created an unequal situation for American steel producers.

“When countries like China intervene in the market, they continue producing steel exports at below fair market value. This allows them to flood the U.S. market and undercut domestic companies.

“The consequences are measured not just on a balance sheet, but in the loss of many thousands of good-paying jobs. In my home of Southern Illinois, Granite City Works has stopped production and idled nearly 2,000 steel jobs. We still have no idea when they can return to work.

“These are hard working men and women. Some are second or third generation steelworkers. They have families to feed, and they deserve to be angry.

“Fair trade shouldn’t be a partisan issue. Many Republicans and many Democrats speak with one voice on this. When American workers lose their jobs due to unfair and illegal trade, they must have tools to protect themselves.

“Last year, Congress passed legislation I introduced to strengthen America’s trade remedy laws. Too often, anti-dumping and countervailing duty investigations forced domestic companies to suffer permanent damage before they could seek help.

“I’m a firefighter by trade. That process would be like forcing a homeowner watch their home burn to the ground before they could call the fire department. It makes no sense.

“Because Congress acted in a bipartisan fashion, we now have tools to put the fire out when the first sparks ignite. The law now allows the government to select the most adverse facts available if a foreign firm refuses to cooperate with an investigation.

“It also allows a company to prove injury when unfairly traded imports result in a loss of income or profit. Further, it permits the Department of Commerce to more quickly impose preliminary and final tariffs on illegally-traded products.

“These measures are fully compliant with existing trade agreements. We shouldn’t hesitate to us them.

“We’ve taken some steps in the right direction with rulings on recent anti-dumping and countervailing duty petitions. However, it’s the final determinations that will give domestic companies the certainty they need to begin producing steel once again.

“In addition, I wish to add my voice to those opposing granting China Market Economy Status at the WTO. China is not a market economy. And granting them this concession could make it more difficult to fight steel and other product dumping.

In closing, I urge you to please remember the voices of our steelworkers here today. They are on the front lines of this battle. And they are hurting. Let’s continue to fight for them.”

Alan Dunstan’s testimony

“Mr. Chairman and members of the committee, my name is Alan Dunstan; I am the Chairman of the Madison County Board. Madison County is the eighth largest county in Illinois and is located in the southwestern part of the state along the Mississippi River.

“Steel has been produced by workers at the Granite City, IL facility since 1878. The facility is currently owned by United States Steel and is an ‘integrated steel mill.’ Locally, we refer to Granite City Steel as making steel from the ‘rocks to the docks.’ Iron ore pellets are shipped from the iron ore range in Minnesota to the mill. Finished steel products are then shipped throughout the United States.

“U.S. Steel employs 2,200 men and women at Granite City Steel. There are more than 5,000 people whose employment is contingent on the operation of the mill, including suppliers, finishers and others in the supply and service chain.

“Historically, Granite City Steel has depended upon a diverse customer base and diverse product mix. The plant was known for its flexibility and expertise in producing a wide variety of high-quality grades of steel. Granite Steel is an efficient operation with high labor productivity and is known for its quality steel and on time delivery to customers.

“This production strategy, combined with the mill’s high productivity, enabled the mill to withstand multiple economic downturns, surviving for many decades as an independent steel company.

“U.S. Steel recognized the value of Granite City Steel and in the last five years has invested heavily in modernizing the mill, spending more than $271 million. In 2008, U.S. Steel and Sun Coke Industry jointly invested more than $600 million in a new steam powered, co-generation plant adjacent to the mill.

“In December of 2015, U.S. Steel began laying off employees at Granite City Steel. In the following four months, more than 2,000 employees were laid off and additional layoffs are expected. Approximately 40 percent of the employees live in the Granite City area. Of the other 60 percent of the mill’s employees, the majority live in Madison County.

“The layoffs of the Granite City Steel employees translates to more than $100 million in annual loss wages, and more than $20 million in loss state and federal income tax. When factoring in layoffs in accessory industries, those figures are compounded substantially.

“Importantly, those numbers do not take into account the resulting hardships incurred not just by the mill’s workers, but by their family members.

“When you take into account the employee layoffs made by suppliers and service businesses, and the impact on the families of those workers, you have a dramatic, negative economic impact on families, school districts and local businesses, as well as municipal, county and state governments.

“Taxing districts are greatly impacted by plummeting tax revenue needed to support vital services. Granite City Steel annually pays approximately $2.9 million in property taxes to the local school district.

“As a result of the plant idling, the unemployment rate in Granite City alone has jumped from 7.1 percent to 9.6 percent.

“I am sure the members of the committee are aware that the layoffs and the subsequent dramatic, negative impact on thousands of men, women and children, resulted from a decision made by U.S. Steel to reorganize its United States operations.

“This action was an unfortunate but necessary response to the collapse of the pipe and tube market, a collapse which is the direct result of the U.S. marketplace being swamped by flat roll steel — both hot roll and cold roll — unfairly and illegally dumped on the United States market by companies in China, South Korea and others, companies which in many cases are subsidized by their respective governments.

“No time frame for re-starting the Granite City facility has been announced. Market conditions will determine when the facility reopens.

“Mr. Chairman, members of the committee, the proud, hard-working men and women employed at Granite City Steel are not looking for a handout, they simply want their government to provide them, to provide the U.S. steel industry, with a level playing field. They will take it from there.

“On behalf of everyone in Madison County and Southwestern Illinois impacted by the idling of Granite City Steel, I thank you for this opportunity. If there are any questions I would be happy to answer them at this time.”

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