Speeches & Floor Statements

Remarks Of Sen. Alexander - Steel Tariffs

Posted on September 2, 2003

The distinguished minority leader has just talked about jobs. Most of us in August talked to constituents who are talking about jobs. The President of the United States yesterday in a Labor Day speech in Ohio talked about jobs and specifically manufacturing jobs. As he usually is, he was very straight forward about what is going on in our country. He said the economy is getting better, and I give him credit for that. He also said that the jobs aren't coming along as fast as he would like. And he pledged to work harder on that. He talked about appointing a sort of manufacturing job czar in the Commerce Department, which I would welcome. And over the past several weeks the administration has held 19 different roundtables with manufacturers in this country to try to understand from them what government policies could be that would make it easier for us to keep our manufacturing jobs. I believe the President focused his speech on Labor Day on perhaps the greatest economic challenge we have before us, in this very fortunate United States of America, and that is how do we keep our manufacturing jobs from going overseas over the next 10 years as we participate in a global marketplace? We faced that before with Japan 20 years ago. I can still remember how everybody thought Japan was going to drown us, and they didn't. Now we're faced with China as well as others. China is bigger, not as prosperous as Japan, but bigger. And we have a terrific challenge in how do we keep our manufacturing jobs from moving overseas? On September 15, Commerce Secretary Don Evans is expected to announce more about President Bush's plan to save manufacturing jobs and to keep them from going overseas. The secretary is scheduled to speak in Detroit on September 15. I have a respectful suggestion for what Secretary Evans might say in his speech in Detroit on September 15 about saving manufacturing jobs. He will be there in the home of the American automobile industry, and I believe the most helpful thing he could say for the working men and women of America, especially in the automobile industry, is that we will end the steel tariffs now. Now, I don't want to simplify this. Ending the steel tariffs that were imposed in March 2002 won't by itself stem the loss of manufacturing jobs in the United States of America. Manufacturing jobs have been going away from our country for a number of years. They were going away a long time before President Bush became president. Manufacturing jobs have been leaving for a variety of reasons. The first is that we've become more productive. The Saturn and Nissan automobile plants came to Tennessee. Today they employ up to 7,000 people with very good paying jobs. Thirty years ago, instead of employing 5,000, 6,000 or 7,000 people, they'd employ 25,000 or 30,000 people to make the same number of cars. So we're still doing plenty of manufacturing in America as well as in Tennessee, we're just not hiring as many people to do it because we're so much more productive. And there are other reasons manufacturing jobs are under pressure. Chinese currency is too low. Secretary Snow is in China today working on that problem, we hope with some result. Another reason we have difficulty with our manufacturing jobs is that our intellectual property copyrights aren't being respected and protected. And then, the other reason, which every manufacturer in America knows is cost. Every American manufacturer lives on the edge. It is always a battle of cost. If some unexpected cost comes along the manufacturer cuts one or two jobs in order to stay in global competition. And if too many costs come along, they go out of business or move their plants overseas. What are those costs? The cost of labor, the cost of health care, the cost of runaway lawsuits  all of these costs are the costs we hear about as we talk to men and women who are manufacturing in America. But the cost I want to talk about today is a new cost that was added in March 2002 to manufacturers all across America and that is the cost of the steel tariff. The President decided in March 2002 to impose a tariff of up to 30 percent on imported steel, including hot and cold-rolled steel, the kind used to make cars in trucks in our country. The idea was a noble one and a well-intentioned one, hard to argue with. The idea was to protect steel-producing jobs, of which there are about 12,000 in Michigan where Secretary Evans will be making his address on September 15. The trouble is the steel tariff has been destroying steel-consuming jobs, of which there are nearly 800,000 in Michigan, including 300,000 in auto assembly or auto supplier plants. This is true all across America. There are nearly 13 million steel-consuming jobs, 2.1 million of which are automobile related jobs, but the U.S. has only about half that number of steel-producing jobs. Even West Virginia and Pennsylvania have 10 times as many steel-consuming jobs as steel-producing jobs. Now on top of all this, the World Trade Organization has ruled that the steel tariffs imposed in March 2002 are in violation of the global trade rule and have authorized the European Union to impose $2.2 billion in retaliatory sanctions on American imports sold in Europe. from footwear to fruits and vegetables. So this will destroy another batch of American jobs. Here is the sad story of the steel tariff. In 2002, the automobile industry was purchasing only about five percent of its steel from overseas. But as soon as the steel tariff was placed on the imported five percent, the 95 percent of steel that was produced in our country also raised its prices. So suddenly, auto parts suppliers and other steel-consuming businesses, such as microwave oven makers as an example, were paying up to 30 percent more for steel, which was sometimes their most important raw material. Because auto suppliers couldn't raise prices to cover costs, they suffered losses and began to lay off employees. In a few instances, whole plants closed and jobs began to move overseas, where parts suppliers pay a global price for steel. These parts can be made in South Korea, in Germany, in Mexico, in Canada - all around the world. They don't have to be made in Michigan and Tennessee. Let me put this into a little more personal term. In my first year as governor of Tennessee, 1979, nearly 25 years ago, our state was the third poorest in the country with 80 percent of national average family income. In some counties at that time about one- third of our manufacturing jobs were in the textile business. Tennessee at that time was making no cars and no trucks, and we had only about two dozen auto suppliers. Then the automobile industry began to move south. Not just into our state but all around us. Tennessee became the fourth largest maker cars and trucks. Nine hundred auto parts suppliers followed. Better paying auto jobs - these are jobs that are $30,000, $40,000, $50,000 a year - replaced low-paying textile jobs. Our family incomes grew faster than any family incomes in America. They jumped to 100 percent of the national average family income by 1990. And today, one-third, or at least 100,000 of all Tennessee's manufacturing jobs are automotive jobs. These are the good jobs that we are glad to have. On January 21, 2003, Arvin Meritor closed its sunroof and seat plant in Gordonsville, eliminating 317 of these good-paying jobs. It reduced by 100 the jobs in its Pulaski plant. It did this because after the tariffs, its steel prices rose between 13 and 40 percent. That's not all, the Dana Corporation, which employs 3,000 Tennesseans making axles and brakes watched its steel prices increase 20 to 50 percent since the tariff. And the Dura Corporation, which employs 1,176 at five facilities in my state, was purchasing all of its steel from United States producers when the tariff was imposed in March 2002. As a result of the tariff, Dura lost money in 2002 and is considering moving to overseas production, which is very bad news for 765 Tennessee families in Gordonsville, Greenbrier, Lawrenceburg, Milan and Pikeville. I ran for the United States Senate last year to support President Bush, and I have proudly done that. I think he is on the right track with our economy. I believe our economy is beginning to move after a series of blows that no other economy in the world could have withstood. I support this President. But I also said in my campaign last year that I believe the steel tariff was bad for Tennessee, was bad for American working families, and I still believe that. This fall the President will have an opportunity to review his decision to impose the steel tariff. Shortly after Secretary Evans' speech in Detroit on September 15, the International Trade Commission will report what the consequences of the tariff have been. This is a welcome opportunity for the President to make a mid-course correction. I hope he will decide that he's made a good faith effort to save steel jobs, but that effort has already has shifted more steel-consuming jobs overseas than exist in the steel-producing industry in the United States. That it is the wrong policy, and the right to do is to end the steel tariff. The best thing that Secretary Evans can do in his September 15 Detroit speech is to announce that the President has decided to save thousands of jobs for working men and women in Michigan, in Tennessee and in America in the automobile industry and other steel-consuming plants by ending the steel tariff.