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ALUMINUM PRODUCER ASKS IF TAX IS PICKING 'WINNERS AND LOSERS'

 /EDITORS: If you wish more information, or a copy of the testimony, please call Debbie Boger, vice president of Ormet Corporation at 304-234-3919. Thank you for your consideration./
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 WASHINGTON, March 31 /PRNewswire/ -- Today Emmett Boyle, chairman, president and CEO of Ormet Corporation, the nation's fourth-largest aluminum producer, told members of the U.S. House of Representatives' Ways and Means Committee that the government should not use its taxing powers to pick winners and losers in the competition among steel, plastics and aluminum. According to Boyle, the Clinton administration's Energy or Btu Tax Proposal is unfair and can lead to a loss of jobs as opposed to the job creation promised by the administration.
 "We support the goal of decreasing the federal deficit, and we understand that taxes need to be part of that effort. We support the creation of jobs, and we know that will cost money. We are willing to pay our fair share," said Boyle. "But we should not have to bear an unfair and unreasonable burden. We should not be put at a serious competitive disadvantage, and, unfortunately, that is exactly what the proposed Energy Tax does. If we can't operate at a profit, we can't stay in business and continue to employ people."
 Ormet Corporation has asked the U.S. Treasury Department and members of Congress not to tax the fossil-fuel generated electricity used as an ingredient in the production of aluminum. In its current form, the Clinton administration's Energy Tax Proposal does not tax the petroleum used to make plastics, the natural gas used to make fertilizers and the coal used to make coke for the steel industry, yet the non-fuel use of electricity in the aluminum production process is still subject to this tax.
 Ormet, which operates a smelter in Hannibal, Ohio, and an alumina plant and bulk marine terminal in Burnside, La., estimates this proposal will mean a $15 million tax increase. When combined with the proposed waterways tax, Ormet's cost of production will increase by 7.5 percent, well above the 3 percent increase estimated by Treasury Secretary Lloyd Bentsen.
 "Our use of electricity is very efficient, and it would be impossible to improve without totally rebuilding our facilities, which we estimate would cost $2 billion. That would be a foolish undertaking and just as unreasonable as imposing a tax on electricity for non-fuel use while exempting the non-fuel use of other forms of energy," said Boyle. "One hundred and seventy years ago, Chief Justice John Marshall wrote, `The power to tax involves the power to destroy.' It would appear the Clinton administration is selectively using that power to determine which industries and companies will prosper and which will not. In a free economy, this should be determined by the marketplace, not the state."
 Boyle pointed out that:
 -- Aluminum is a commodity, and the world market price is at a 40-year low when corrected for inflation;
 -- Foreign aluminum producers pay an average of 22 percent less for electricity, and in some countries producers pay 80 percent less; and
 -- The Clean Air Amendments of 1990 are expected to increase Ormet's energy costs by as much as 40 percent by the year 2000.
 "The aluminum industry is already at a competitive disadvantage. Taxing aluminum producers for the non-fuel use of coal-generated electricity while exempting alternate materials, namely plastics and steel, is unfair," said Boyle. "We hope the members of Congress can right this injustice."
 Ormet Corporation directly employs more than 2,000 people, and an additional 20,000 indirect jobs are dependent on this company. Ormet spends more than $250 million annually in wages, benefits and materials.
 /delval/
 -0- 3/31/93
 /CONTACT: Debbie Boger, vice president of Ormet, 304-234-3919/


CO: Ormet Corporation ST: West Virginia, Ohio, Louisiana IN: MNG SU: ECO

DM-KC -- PG005 -- 1555 03/31/93 14:00 EST
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Date:Mar 31, 1993
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