- The Washington Times - Thursday, December 7, 2006

The International Trade Commission probably will end steel duties that the major automobile manufacturers are objecting to, auto executives told editors and reporters at The Washington Times yesterday.

Representatives of the six largest auto companies with U.S. manufacturing facilities asked the ITC in October to terminate the duties because the U.S. steel industry no longer needs the duties’ protection and because the car companies want a more flexible source of supply.

The ITC is scheduled to make a decision Dec. 14. Four of the six members need to approve lifting the duties.

The measures, imposed in 1993, were designed to protect U.S. steel manufacturers from unfair foreign competition.

“I think we have a substantial chance of making it, but everything’s going to have to break right to get to four votes,” saidlawyer Lewis E. Leibowitz, whose D.C. law firm Hogan & Hartson represents DaimlerChrysler, Ford Motor Co., General Motors, Honda of America Manufacturing, Nissan North America and Toyota Motor North America.

Steel makers disagree, saying the industry still needs the duties to protect against unfair overseas competition.

“The threat,” according to American Iron and Steel Institute President Andrew G. Sharkey III, “is from foreign governments actively subsidizing excess capacity, which creates regional imbalances that are already negatively impacting the global steel market, including the U.S.”

Ford Vice President Stephen E. Biegun called the tariff effectively a tax on imports, one that “is passed on to the consumers.”

“It’s passed on to the industrial consumers, to the buyers of the vehicles, to the extent that we can pass it through, and it creates all the inefficiencies that high taxes cause,” he said, adding: “Anti-dumping duties are not a permanent entitlement.”

Richard Cover of General Motors said he did not think “steel will be dumped into the United States at unfair prices” if the duties are eliminated, but that he was concerned about the cost and long-term availability of steel and the reliability of supply.

Mr. Cover, who is GM’s global commodity manager for steel, said one ton of steel must be procured for the average car, accounting for 5 percent of total cost.

The industry needs a more flexible and broader supply, he said, adding that steel companies now can “be selective in what products they develop and what kind of products they sell to us.”

Steel, Mr. Leibowitz said, is now a healthy industry that has consolidated itself into a few companies. If prices were to drop, he said, the steel companies could cut production to increase prices again.

Moreover, he said, the steel industry could seek new help from the government if it faces new foreign competition.

The dispute, he said, is “not about the past, it’s not about who’s worse off, whether it’s the steel producers or the auto producers.”

“It’s about what would happen if these duties were revoked,” he said.

“And keep in mind,” he continued, “at the end of the day, if the steel industry is injured by an influx of imports, they know where the ITC is, they know where the Commerce Department is, they can file another case.”

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