Steel Companies Unveil an Industry Recovery Plan

Weirton, WV - Weirton Steel Corporation's top official joined other steel executives in announcing an action plan designed to promote the recovery of the domestic steel industry.

The plan, which soon will be forwarded to the Bush administration, calls for immediate government action to deal with the destructive surge of steel imports, the promotion of consolidation among steelmakers and the reduction of domestic capacity.

"We want a swift and strong remedy from President Bush to counter unfair imports. Meanwhile, the president has asked our industry to develop a restructuring plan which would be a key component of his international steel trade initiative. Our proposal is a proper and effective response," said John H. Walker, Weirton Steel president and chief executive officer.

The two-step plan includes:

• Strong and comprehensive Section 201 tariffs on all steel product groups recently determined by the U.S. International Trade Commission (ITC) to have seriously injured the domestic steel industry.
• Removal of barriers to consolidation.

The plan, formulated at a recent meeting in Pittsburgh, has gained the support of many members of the American Iron and Steel Institute and the Steel Manufacturers Association. In addition to Walker, other meeting participants included: Thomas J. Usher, U.S. Steel; Daniel R. DiMicco, Nucor Corp.; and Carl L. Valdiserri, Rouge Steel.

Addressing the first step, Walker said that without effective tariffs, the financially distressed domestic steel industry will stand little chance of restructuring itself.

"We believe at least a 40 percent tariff is the necessary and proper response to the injury our industry has suffered because of unfairly traded steel imports. Tariffs should extend for the maximum four-year period and cover the 16 steel product lines the ITC determined was injured," Mr. Walker said.

"A tariff of less than 40 percent will not provide the relief our industry needs and make consolidation far too risky for any company to attempt."

The second step centers on securing government assistance - mainly through existing programs to remove employee-related obligations that certain steel companies have accrued through prior restructuring action. The obligations have been the main barrier to consolidation.

Both employee-related obligations and commitments to workers displaced by previous consolidations would be reassigned to the proper government agencies. Existing government programs would absorb as much of the costs as possible. Direct government payments to any of the steel companies are not expected and acquiring companies would remain responsible for their own obligations.