Trade case calls for investigation, quota order to stop industry job losses

CONTACTS:  Wayne Ranick  412-562-2442;  412-901-8442
                       Gary Hubbard  202-778-4384;  202-256-8125

Eds Note: Click here or visit www.usw.org/tires for background and other supporting documents related to this case.

WASHINGTON (April 20) – The United Steelworkers (USW) today announced the filing of a major trade case against the flood of imported consumer tires from China that have led to thousands of job losses and a growing number of plant closings throughout the U. S.

Leo W. Gerard, USW international president, declared: “American workers are struggling to make it through the worst economic crisis in 80 years. Our tire industry is collapsing under the weight of 46 million Chinese tires entering our shrinking market annually.”
 
He said, “We are aggressively using America’s trade remedy laws to help workers and their employers combat an import surge from a country not playing by the rules. Section 421 is a tool to redress Chinese import surges that gets us through the current economic crisis and preserves a part of America’s industrial base.”

The petition filed by the USW on behalf of its members employed in the U.S. tire industry was made under Section 421 of the Trade Act of 1974.  Documents submitted in the case show a huge surge of passenger car and light truck tire imports from China during 2004-08. 

The USW represents about 15,000 tire workers employed at 13 plants in nine states, which accounts for nearly half of the industry’s production capacity in 2008.  The domestic tire industry consists of ten producers with 27 plants in 15 states.

The consumer tire-producing states include: Alabama, Arkansas, Georgia, Illinois, Indiana, Kansas, Mississippi, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee and Virginia.

According to the USW petition filed with the U.S. International Trade Commission (ITC), imports of consumer tires from China increased from 2004 to 2008 by 215 percent in volume and 295 percent by value.

In 2008, China exported nearly 46 million consumer tires with a value of more than $1.7 billion to the U.S., making it the largest source of consumer tire imports.

Citing China’s share of total imports of consumer tires, the petition reports that imports have nearly tripled by volume during the surge period, while domestic production of consumer tires have declined by more than 25 percent.

The USW said it seeks to combat this egregious trend, by requesting the government to impose an import quota on China of 21 million consumer tires used on passenger cars, light trucks, minivans and sport utility vehicles per year.  The quota sought by the USW, which would return China tire imports to a 2005 level, would increase five percent per year over a three-year period. 

The petition says this would improve domestic job security, enable U.S. tire makers to regain lost market share, increase production and sales, and allow investment in capital equipment to better compete in the long term. 

Section 421 of U.S. trade law was passed by Congress in 2000 to enable companies, groups of workers and other parties to seek relief when rapid increases in imports of certain products, cause or threaten “market disruption” to a domestic industry.

Tom Conway, USW International Vice President and Chair of the union’s negotiating committee at Goodyear Tire and Rubber Corp., said: “We believe the evidence strongly supports an affirmative outcome as a result of this import surge from China.” 

He said workers and the domestic industry have both been injured. “We need a quota imposed to reduce the artificial level of imports flowing from the distortions in the Chinese economy and the government’s manipulation of its currency,”

Conway identifies nearly 7,000 U.S. tire workers have been affected by six factory shutdowns of consumer tires since 2004. The latest plant closing was announced last week by Michelin North America of the BF Goodrich unit in Opelika, Al., involving 1,000 workers. Other shutdown tire plants during 2004-08 include Continental Tire, Bridgestone/Firestone, and Goodyear.

USW fact sheets and background on the USW imports trade case against Chinese consumer tire products are available by clicking here, or visiting www.usw.org/tires.