Bethlehem CEO Duane R. Dunham Reports To The Congressional Steel Caucus
For Immediate Release
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WASHINGTON, D.C., September 15, 2000 -- Reporting yesterday to the Congressional Steel Caucus on the current condition of the American steel industry, Duane R. Dunham, Bethlehem Steel chairman, president and chief executive officer said, "The condition of America's steel industry is arguably the strongest of any steel industry in the world." But, he continued, "it's an industry that still faces a very serious problem: unfair and injurious trade. Our shareholders, our workers, and our communities are being cheated of what should be very good times indeed."
The report was presented at a briefing to the Congressional Steel Caucus on behalf of member companies of the American Iron and Steel Institute. The report was given against a backdrop of a series of three sunset review hearings, being conducted this week in Washington, D.C. by the U.S. International Trade Commission (ITC). The purpose of the hearings is to assist the ITC in determining whether antidumping orders should be kept in place against imports of cold rolled, corrosion-resistant steel and cut-to-length plate products from certain countries.
Commenting on the events of the past two years, Mr. Dunham said, "There were signs of recovery in the second half of 1999 from the devastation of the 1998 steel crisis, when America was allowed to become the World's Steel Dumping Ground. But the unprecedented level of unfairly traded steel imports in 1998 was a cause of long-term damage to our industry, and the Clinton Administration's Steel Report did not address our industry's condition in 2000.
"With a strong economy, a highly competitive steel industry and strong steel demand, the past several years should have been the best of times for the revitalized American steel industry. Instead, 1998 was a year of crisis. The adverse effects of the 1998 crisis were felt throughout 1999. And in 2000, imports are again approaching crisis levels.
"In 1999, because of successful trade cases, U.S. steel imports did decline from record levels, but only to their second highest total ever. Meanwhile, the negative financial effects of the 1998 crisis were actually worse in 1999 than in 1998, as net income in our industry went from a positive $1.1 billion in 1998 to a negative $476 million 1999."
Mr. Dunham continued, "It's against this background, Mr. Chairman, that steel imports are again flooding in at near-record levels. Through seven months this year, steel imports are almost 7 percent higher than in crisis year 1998.
"Once again, as in 1998, we have a supply, not a demand, driven steel crisis in the making and, once again, it's being fueled by a flood of unfairly traded imports. The approaching crisis this time, however, is being driven not by two or three countries in two or three products, but by dozens of countries in many product lines."
As a result, fair value has yet to be restored to the domestic steel market, as the average import customs value for all steel mill products in July was almost $60 per ton below the value in the first quarter of 1998 -- a 13 percent drop.
"All of this is having a very negative effect in 2000," Mr. Dunham reported. "Six steel companies remain in bankruptcy; one (Gulf States Steel) has announced it's shutting down operations; and many of the 10,000 steelworkers adversely affected by the 1998 crisis have not had their jobs or hours restored."
Mr. Dunham concluded his testimony by saying, "The steel report makes it clear that the structural problems in the world steel industry that led directly to the 1998 crisis have not been addressed."
To combat the problem, he offered the following short and long-term actions:
1. Strengthen U.S. trade laws to ensure that currency exchange rates are market-based and work to eliminate foreign excess capacity, closed markets, dumping, subsidies, and cartel practices.
2. Resist efforts to weaken WTO and other international negotiations.
3. Enact public policies, including non-trade policies, which stimulate the addition of more world class domestic capacity.
"This is obviously not the time to relax U.S. trade law," said Mr. Dunham. "On the contrary, this is the time for trade law strengthening and for more vigorous enforcement of our existing trade laws."