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Steel Tariffs Unexpectedly Work Against White House

September 28, 2003|Warren Vieth | Times Staff Writer

"The steel tariffs have accelerated our outsourcing of products to offshore companies," spokesman Kurt Ruecke said. "We did it out of necessity. We would have lost the business otherwise."

But the view appears quite different on the other side of the tariff divide. In Pennsylvania, steel makers wield more political clout than metal-benders, and Bush could experience a counter-backlash if he chose to end the levies ahead of schedule.

The prospect of ending the tariffs infuriates Carlo DiMidio, one of several thousand union members who attended a tri-state rally near Pittsburgh last weekend to warn the White House of what might happen if the tariffs were scrapped.

"Mr. Bush wanted the steel makers to merge. We're merging. We're doing what he wants. What else does he want?" fumed DiMidio. "Give us a chance. Don't stop the tariffs now; we're on a roll."

John P. Surma, president of Pittsburgh-based U.S. Steel Corp., said his company had spent $1 billion acquiring National Steel Corp. and undertaking expensive improvements since Bush's tariffs took effect. Although plant employment has declined during that period, it would have fallen even further if not for tariffs, he said. U.S. Steel has about 30,000 U.S. employees, nearly 7,000 of them in western Pennsylvania.

If Bush ends the tariffs early, Surma said, the industry's consolidation could come unglued, along with its effort to preserve jobs and retiree benefits.

"Roll the videotape back to what it meant to 50,000 people back in 1998, 1999, 2000," Surma said, recalling the era of depressed prices. "They're all out of work now."


But so is Mike Chubb, the Michigan engineer.

Chubb, 49, lost his job in March along with 12 other employees at Dowding Industries Inc., a Lansing-area metal-stamping firm that makes brackets, braces and supports for diesel truck engines. The company's president, Chris Dowding, said tariff-induced steel price increases were the "dominant factor" in the decision.

Chubb has been looking for work since. A 30-year industry veteran, he has been turned down by prospective employers who told him he was overqualified and feared he would quit when something better came along.

One of Chubb's last assignments at Dowding was to try to re-engineer a spot-welding station where a worker toiled away putting nuts on a spindle, punching a button to activate the welder, and tossing the finished hose brackets into a bin.

The company calculated that to produce the parts as cheaply as they could be purchased from a Korean supplier, the worker would have to bat out about 800 brackets an hour. The best production rate Chubb could achieve was about 200. The job is now being done by someone on the other side of the Pacific.

"It's not that the Korean is working any faster than the American," Chubb said. "It's that the Korean is working for pennies per hour."

And using steel not subject to tariffs.

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