USW International President Leo W. Gerard, International Vice President Tom Conway, former International Executive Ron Hoover and others testified at today's public hearing before the U.S. Trade Representative in Washington, D.C. The hearing is the final step in the trade case in which the U.S. International Trade Commission has determined that surging low-cost consumer tire imports from China have damaged the domestic industry with lost jobs and factory shutdowns.
In today's testimony, Gerard makes the case for why the U.S. Trade Commission's recommended remedy is not only correct, but crucially important to the industry, workers and their communities. He urged the panel to keep workers in mind as they make their decision.
"These are hard-working men and women, many of whom have spent their entire adult careers in the industry. Their jobs provide the income, the health insurance, and the retirement benefits that sustain middle class families and stabilize entire communities. These workers can make as many tires, and whatever kinds of tires, the market demands. But these workers cannot compete when the market is being overwhelmed by a massive flood of tires from China. In short,the industry is at a turning point, and relief will determine its future," Gerard said.
Conway refues the opposition's arguments and Hoover, who negotiated tire and rubber contracts for more than 40 years, reminded the officials that this issue is not only about industry, but about the thousands of retired rubber and tire workers and their families who depend on the industry for their health care.
Last month, a majority vote of the ITC found that tariff relief was needed to urgently reduce tire imports. Evidence showed more than 5,100 domestic consumer tire production jobs were lost between 2004-08 by the flood of Chinese tire imports that undersold producers in the U.S. and caused market disruption. An additional 3,000 jobs have been announced as being eliminated by tire plant closures by the end of this year.
The ITC commissioners who found market disruption, unanimously recommended that tariffs be placed across the board on passenger and light truck tires from China – 55 percent in year one, 45 percent in year two and 35 percent in year three.
The USW is asking the U.S. interagency group reviewing the remedy to recommend to President Obama that the ITC proposal be supported. In addition, the USW wants the remedy modified upwards – above the 55 percent duty advocated by the trade commission in the first year.
Under the Section 421 trade law provision for this case, the effective date of any remedy provided by the President would be Oct. 2, 2009. Consumer tire imports from China during 2004-08 have increased 215 percent by volume.
Chinese tire producers have submitted to the trade commission, projected growth of exports to the U.S. in 2009-2010 as an additional eight million tires over the 46 million tires imported from last year.
USW data for 2004-08 shows the domestic industry has suffered massive injury. Capacity by the tire companies is down 17.8 percent, and production is down by 26.6 percent. Employment has been reduced by 14.2 percent along with reductions in hours worked and wages paid. Net domestic sales were down 28 percent.
As pointed out by the USW, the ITC commissioners who voted on the remedy were unanimous that there would be little adverse effect on U.S. consumers from their recommended remedy. Gerard noted studies done by communities with tire plants that have been at risk have estimated the loss to the community from a tire plant closing are as much as $1 billion and the total job losses are a multiple of those at the plant. He said these studies were not done as part of the 421 case, but by economic development agencies to understand the possible effects from losing a major employer.