Metals exec asks for manufacturing base support

March 16, 2005

A specialty metals executive today emphasized the need for the implementation of public policies that support a strong U.S. manufacturing base, according to testimony presented today on behalf of the Specialty Steel Industry of North America (SSINA) to the Congressional Steel Caucus.

SSINA Chairman Jack Shilling told the caucus members that each year the playing field seems to tilt more against maintaining a manufacturing base in the U.S. For specialty metals, according to Shilling, this lack of a level playing field could result in the outsourcing of innovation with the U.S. losing its leading edge technology and production capacity moving offshore.

Shilling referred to a recent SSINA white paper entitled The Future of the Specialty Steel Industry in North America that describes the challenges facing the industry and its importance to the national defense and industrial economy. He described numerous meetings with senior officials in the Defense Department, Members of Congress, and House and Senate Armed Services Committee staff members. Said Shilling, "From these meetings, I have concluded that there is an inadequate focus by the Department of Defense (DOD) on the importance of specialty metals to our national security." Shilling based this conclusion on several reasons, including DOD studies that ignore the need for vital specialty metals to produce high-technology weapons systems.

"Government procurement policies should support the domestic industry, particularly in the defense area," Shilling stated in listing another policy needing review. "In making this statement, we are not asking for protection. Our industry does not seek or need protection. We are not proposing that government procurement policies be used to prop up an uncompetitive industry. We are, in fact, the global leaders in the manufacturing and technology of these materials. What we are proposing, however, is that government procurement policies support our domestic industry until a level playing field exists."

Shilling emphasized that the basic businesses of U.S. specialty metals companies must be healthy, and they cannot survive solely by producing defense-related materials. He reminded the caucus of upcoming reviews of existing antidumping and countervailing duty orders on several stainless steel product lines. "I cannot indicate strongly enough that we need these orders to continue. The behavior of foreign producers in the marketplace has been entirely clear. Many of them continue to be subsidized by their governments, and most of them dump their products into the U.S. marketplace," he explained.

Other challenges facing the specialty metals industry include a proposed new OSHA rule on hexavalent chromium exposure that Shilling testified is both unnecessary and needlessly costly; the request by the Bush Administration to repeal the CDSOA or Byrd Amendment; and China's economic system and undervaluation of its currency, which has made U.S. imports into China less competitive.

Jack W. Shilling, PhD, is executive vice president, corporate development officer and chief technical officer of Allegheny Technologies Inc., Pittsburgh, Pa.

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