Testimony of

Tom Conway,

United Steelworkers (USW) International Vice President

Before the

U.S. International Trade Commission Sunset Public Hearing

on

Hot-Rolled & Flat-Rolled Carbon Steel Import
Orders Continuation Review for Russia, Japan and Brazil

Good morning Chairman Okun and members of the Commission.  I am Tom Conway, the International Vice President of the United Steel, Paper and Forestry, Lumber, Manufacturing, Energy, Allied Industrial and Service Workers International Union -- the USW.  I appreciate the opportunity to testify before you again on behalf of our thousands of Steelworker members who make hot-rolled steel.

I would also like to extend my personal appreciation to the Steelworker members who are in the audience today.  Like me, they have come here today to show their support for these trade actions against dumped and subsidized imports of hot-rolled steel from Brazil, Japan and Russia.

USW members produce hot-rolled steel at over 20 facilities and supporting operations, such as coke and iron ore suppliers, and include about 21,000 employees both union and management.  Let me emphasize – those jobs are at risk from unfairly traded, dumped and subsidized imports.  That is what we are fighting for today.

For those members, and for all the members of the USW, I want to state clearly that we can beat the import competition from any country so long as the competition is fair.   USW members work very hard and play by the rules and they expect others to do so as well.  They also expect that our government will make foreign producers play by the rules by enforcing the trade laws.  Continuing these trade remedies against hot-rolled steel from Russia, Japan and Brazil is critical to the future of our members and retirees.          

Union steelworkers have sacrificed over and over again during the last decade to save the U.S. steel industry, steel industry jobs, and benefits and dignity for our retirees.  We agreed to the consolidation of the steel companies, major workforce reductions and changes in workplace rules to increase productivity.  Our members and retirees suffered lay-offs, forced retirements, billions of dollars in losses, and substantial reductions in company-provided pensions and health-care. Why did this happen?  Because many steel companies were driven into bankruptcy by unfair trade in steel products.  For these workers, unfairly traded imports cost them their entire life’s work. 

We -- the union, its members and our retirees -- have done everything possible to ensure the viability of this industry which has been hurt by unfair trade over the years.  Factors like unfair trade are beyond our control, but they are within your control.  These orders must be continued, particularly following the deep recession from which the industry is only just starting to emerge. 

With trade orders in place against the unfair traders of hot-rolled steel, companies were able to earn modest profits from 2004 to 2008.  This meant jobs for our members and some additional benefits for our retirees. During this time, the USW also insisted that the steel companies contribute into voluntary employee benefit funds, or VEBA funds, in order to help provide health care, prescription drug benefits, and supplemental medicare for current and future retirees. 

Unfortunately, in the fall of 2008, the economy went into severe recession and demand for steel products plummeted, which hurt us in a  great many ways.  This has greatly weakened our hot-rolled producers and all those working in this industry as a result.  The evidence is clear:  lost jobs, shut down furnaces and rolling mills, capital expenditures deferred or cancelled, and VEBA payments deferred.  Our members at some facilities are also working without the incentive payments agreed to by the companies for the same reasons.   In the case of the Severstal plants in MD and W VA, we weren’t able to get new labor agreements until very recently for our members there because of the incredibly poor market conditions. Those members lost wages and benefits as a result. 

As a result, our members and other workers are extremely vulnerable today.  Fortunately, the market has begun to recover, but that recovery is by no means complete or even certain, and the industry is far from healthy still.  We are just starting to see mills reopen and steelworkers getting back to work.  We are glad to see that some of our members at the Severstal mills that were just sold to Renco will be going back to work.   But for this recovery to continue, the mills need to be able to increase prices to cover rising raw material costs and to regain profitability at reasonable levels.  They need to be able to increase production and sales so that they can continue to reopen facilities and put steelworkers back to work. 

While steel prices have been going up, much of that increase is plowed back into raw material costs rather than a margin for the companies.  Coming on two plus very tough years, simply covering raw material cost increases does not solve the problem for the industry or the union.  The business has really become “hand to mouth”.  I have never seen anything like it before. 

The industry is still very vulnerable, so it worries us a great deal if dumped imports are going to be allowed back into the market again – especially from such large, export-oriented sources like Russia, Brazil and Japan.  If that happens, the pressure on pricing will cause profits to again dry up and plants that are just starting to open will close.  Steelworkers, their families and their communities will again be hurt. 

In 2005, this Commission continued the orders and suspension agreement and gave the U.S. hot-rolled industry a chance to get back on its feet after a very difficult period.  On behalf of myself and our members, I want to thank you for that.  In response to that chance, the union and the companies continued to make the necessary changes that brought the industry back to profitability.  That could not have happened without these trade remedies against Russia, Japan and Brazil. 

So once again, our future lies in your hands.  On behalf of the union members who make hot-rolled steel, the retirees that depend on the health of this industries, and all of the communities they support, I urge the Commission to grant our workers and this industry the relief they need by continuing  the orders and supension agreement against hot-rolled steel from Russia, Japan and Brazil.   Thank you.

Click Here for a copy of Conway’s testimony.

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