Saturday, September 23, 2006

Carmakers seek end to steel tariffs

Friday, September 08, 2006
Carmakers seek end to steel tariffs
Technical improvements, retiree benefits drain mills
Ken Thomas / Associated Press

WASHINGTON -- A coalition of U.S. and Japanese automakers wants to end penalty tariffs on certain types of steel, saying the measures make it difficult to remain competitive in the global marketplace.

Industry officials said it marked the first time the six automakers have joined forces on a trade issue. The group includes General Motors Corp., Ford Motor Co., DaimlerChrysler AG, Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co.

The U.S. International Trade Commission is holding a hearing on Oct. 17 to consider whether it should end current penalty tariffs on "corrosion resistant" carbon flat steel products.

The orders were first put in place in 1993. The ITC will decide whether they should remain for another five years.

Ken Cole, GM's vice president of government relations, wrote in a letter to members of Congress that the six companies collectively buy more than $200 billion a year in "materials, parts and services" for its U.S. operations and all six "buy the overwhelming amount of the steel used in our U.S. operations from U.S. steel mills."

"The strength of our vehicle assembly operations is reliant upon the ability to obtain key materials dependably and at globally competitive prices," Cole said in a letter obtained by the Associated Press.

Steel manufacturers have said the protections are necessary to help them remain financially viable while implementing technical improvements and fund retiree benefits. John Armstrong, a spokesman for U.S. Steel, noted that automakers have appeared previously at ITC hearings against the steel industry. "We do think we have a meritorious case. We do believe it will be decided on those merits and we believe we should prevail," Armstrong said.

Automakers contend the tariffs drive up the cost of steel and lead to limited supplies. They also say the steel industry has largely rebounded in recent years and no longer needs the protections.

Rep. Joe Knollenberg, R-Mich., urged House colleagues in a Sept. 1 letter to support the automakers "in its effort to terminate these unnecessary trade restrictions."

"Our automotive industry must have access to affordable corrosion resistant steel to compete," Knollenberg wrote.

© Copyright 2006 The Detroit News. All rights reserved.


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