Will Washington leave metalcasters in the cold? The manufacturing industry needs help from the government, and five issues will have the most effect--currency manipulation, illegal immigration, unionization, paid leave and energy cost reduction.

Newpage Corp., Dayton, Ohio, filed a petition in 2006 with the U.S. Department of Commerce (DOC) that made reference to specific Chinese competitors receiving tax breaks, debt forgiveness and low-cost loans. The company wanted the government to level the domestic-sales playing field by applying duties to imports from those companies.

Newpage Corp. is not a metalcasting facility; it makes high-gloss paper. But the company, like many metalcasters, has seen business disappearing in recent years and resurfacing in China. The company was fed up, so it petitioned the government.

And Newpage saw results. In March, DOC announced a preliminary decision to apply U.S. anti-subsidy law to a select group of high-gloss paper imports from China. In a statement from the office of Commerce Secretary Carlos Gutierrez, the petition from Newpage was listed among the reasons the action was taken.

Metal casting imports will not see the benefits of this one-time application of the anti-subsidy law, but the executive action represents the first time anti-subsidies, or countervailing duties, will be imposed on imports from a non-market economy, diverging from a 23-year-old policy and opening the door to government assistance for other manufacturing sectors.

"When we talk about the ability to grow our economy, we have to make sure manufacturing remains strong to take care of our own," Rep. Jerry Weller (R-Ill.) said at the 2007 American Foundry Society (AFS) Government Affairs Conference.

Newpage saw an inequality in its industry and worked with the government to incite change. Metalcasters can do the same, according to lobbyists for the industry. And five issues, depending on the results of this legislative session, will have the most impact on the industry in the succeeding year.

Currency Manipulation

Even with the positive steps taken to counteract illegal subsidies on high-gloss paper, which has the potential to apply to other manufacturing sectors down the road, advocates for the metalcasting industry believe that Congressional legislation is needed to put certain foreign casters on like footing with those in the U.S.

With several international trade bills on the docket for this year's session of Congress, the metalcasting industry supports the Fair Currency Act of 2007 (H.R. 782/S. 796) to redress the longstanding artificial subsidizing of foreign manufacturers through undervaluation of currency.

Some economists cite Chinese undervaluation of the yuan as the prime offense, saying that the country's fixed currency rate--pegging the value of the yuan to the U.S. dollar--artificially lowers the price of its goods.

"The China Currency Coalition estimates that the yuan continues to be undervalued vis-a-vis the dollar by 40% or more," said David Hartquist, speaking on behalf of the coalition before the Senate Banking Committee's Subcommittee on Security and International Trade and Finance on May 23.

The industry has lobbied Congress to support the Fair Currency Act because it will allow DOC to use countervailing duty law and Section 421 market disruption case law to provide relief to domestic manufacturers. The bill also would prohibit the U.S. Department of Defense from procuring castings from China that also can be produced within the U.S.

The issue was initiated in the House by Rep. Tim Ryan (D-Ohio) and now has more than 100 cosponsors. "We have to have an arsenal of democracy to help bring back the industrial base in this country," said Rep. Duncan Hunter (R-Calif.), who has sponsored previous versions of the bill. "And this issue has traction."

It is less certain whether the bill has traction. Similar bills have come up in past Congressional sessions and did not receive the requisite number of votes to pass. The newest iteration of the legislation in the House at press time was being fine-tuned in the Subcommittee on Domestic and International Monetary Policy, Trade and Technology. A Senate version of the bill has thus far received less attention. Sponsored by Sen. Jim Bunning (R-Ky.), S. 796 has eight cosponsors. The bill has been read twice on the floor of the Senate and at press time was under discussion in the Finance Committee.

Illegal Immigration 

The U.S. government has begun cracking down on employers who egregiously hire illegal immigrants, and impending legislation could change the country's immigration policies in profound ways, if it gains the support it needs.

The newly-formed Immigration and Customs Enforcement (ICE) agency recently ramped up their investigations of companies they believe are consistent hirers of illegal workers, according to John Shofi, U.S. Department of Homeland Security, who said those investigations and subsequent prosecutions stand to increase in the near future.

The organization also has begun a pilot program to assist businesses in finding and rooting out undocumented workers. Shofi said companies of all sizes are invited to join with the agency to establish best practices for assuring a registered workforce.

While speaking at the 111th Metalcasting Congress on Friday, May 18, attorney Jorge Lopez, Littler Global, Miami, a firm that represents companies accused of harboring illegal immigrants, agreed that prosecutions will escalate. However, Lopez was concerned that companies may find it difficult to comply with immigration law given the resources that are available to them.

According to the text of the Comprehensive Immigration Reform Act of 2007, the bill would update the existing Immigration and Nationality Act "to provide for more effective border and employment enforcement, to prevent illegal immigration, and to reform and rationalize avenues for legal immigration." Several proposals have been made that specifically identify ways to reach those goals, but the legislation has undergone considerable revision and at press time was still being kicked around Senate committees.

The Employee Free Choice Act

A bill before the current session of Congress stood to change the way metalcasting employees choose union representation and affect the ability of unionized workers to bargain with employers; industry lobbyists oppose that legislation.

H.R. 800, the Employee Free Choice Act, which more recently was introduced in the Senate as S. 1041, would change the process by which employees decide to form a union, eliminating the secret ballot election administered by the National Labor Relations Board and replacing it with a "card check" process, by which the board would determine individuals' desire to opt into a union. Metalcasting lobbyists believe this process would risk the use of public intimidation and coercion against hourly workers.

If workers decide to form a union, the bill also would force them to work with employers to reach binding arbitration after no more than 120 days of contract negotiations.

Supporters of the bill, however, say that it would in fact heighten the freedom of workers to choose to unionize. Coercion, according to the bill's sponsor Sen. Edward Kennedy (D-Mass.), is central to the current system, rather than the proposed rule change. Others say the legislation would improve a system that has become irrelevant in today's workplace.

"Today, pay for hard working people is flat," said Sen. Jack Reed (D-R.I.), one of the 46 co-sponsors of the Senate-version of the bill. "We need some way to boost pay for the everyday worker. We are looking at a system that was designed in the 1930s, and this is a quick fix."

The House version of the bill cleared the various Congressional committees, was read twice on the House floor and passed. The Senate bill, however, did not receive the support it needed. When it recently was brought to the floor, the bill was defeated by a vote of 51 to 48 (60 are required to pass).

The Family Medical Leave Act

Metalcasting industry lobbyists oppose any expansion of the Family Medical Leave Act, including the Family and Medical Leave Expansion Act (H.R. 1369), which they say could raise operating costs, reduce productivity and inhibit benefit packages by granting employees further paid time away from work.

The Family Medical Leave Act of 1993 said that businesses with 50 or more employees must allow 12 weeks of unpaid leave in the case of a serious health condition. Since the act was signed into law, 50,000,000 American workers have taken unpaid leave--52% for personal medical conditions and 26% for the birth of a child or maternity disability.

Several current proposals under consideration by Congress would expand the act to include businesses with fewer than 50 employees or broaden the permissible causes for leave to include non-medical conditions.

Lobbyists believe that employers in the metalcasting industry in particular have given federal lawmakers no reason to expand their influence on small business employee time off and leave.

However, the writers of H.R. 1369 cited a 2000 Department of Labor survey indicating that 3,500,000 American workers declined to take needed family and medical leave in 1999 because they could not afford to take time off without pay. The survey also suggested that higher paid workers were more likely to take their allotted family and medical leave; 73% of those who decided they could afford unpaid leave had annual salaries above $30,000.

The bill also would provide for some public funding to be used to compensate businesses in the event that they are forced to grant further unpaid medical or family leave.

The EnergySMARRT Program

The U.S. Department of Energy (DOE) has under-funded a program by $5.5 million that could save the metalcasting industry hundreds of millions of dollars, according to lobbyists for the industry that want to restore the lost revenue to the initiative.

The program, known as EnergySMARRT, is the result of a competitive solicitation awarded to the metalcasting industry by DOE under the EERE Industrial Technologies Program (ITP) in 2004. Congress gave full funding to the project in its first year but has fallen short of the total $12 million that was to be budgeted over the course of three years.

Spokespersons for DOE neither confirmed nor denied the cuts and declined to say whether the department would consider reinstating the funding. According to an email from a spokesperson, the department plans to continue to work with "the eight most energy-intensive manufacturing industries" in the future to reduce energy costs. And while metalcasting is included among those industries, along with aluminum, chemicals, forest products, glass, mining, petroleum refining and steel, it may not be among those that have shown the most promise in reducing comsumption and saving energy dollars.

"While [ITP's] activities have contributed to reducing overall industrial energy consumption, the industrial landscape is changing rapidly," said DOE spokesperson Chris Kielich. "ITP recognizes the value of EnergySMARRT and plans to provide appropriate funding when projects are meeting their milestones and objectives. ITP's strategy is to direct its investments and resources to those projects that can provide the largest impact for reaching its goals."

Without the remaining $5.5 million investment, in-progress research for the metalcasting industry will not reach its conclusion. And because federal funding is matched by the industry, a total of $13 million potentially will be lost to incomplete research projects, such as the ongoing Clean Steel Casting Research.

The completion of the program stands to save the industry 49 trillion BTUs per year, say industry lobbyists, a 14% reduction that equates to annual savings of $335 million.

For More Information

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Shea Gibbs, Associate Editor