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 WASHINGTON, Aug. 26 /PRNewswire/ -- Two American specialty steel companies and their workers launched a new international trade offensive today, charging that dumping and unfairly priced and subsidized electrical steel imports are undermining the U.S. market.
 Allegheny Ludlum Corporation (NYSE: ALS), headquartered in Pittsburgh; Armco Inc. (NYSE: AS), headquartered in Parsippany, N.J.; the United Steelworkers of America (USWA), AFL-CIO; and the independent unions at Armco plants in Butler, Pa., and Zanesville, Ohio, filed a petition today requesting that the U.S. government impose both anti- dumping and countervailing duties on imports of grain-oriented electrical steel from Italy.
 In addition, Allegheny Ludlum and the USWA petitioned the U.S. government to assess anti-dumping duties on imports of grain-oriented electrical steel from Japan.
 Allegheny Ludlum and Armco are the sole domestic producers of grain- oriented electrical steel. Grain-oriented electrical steels, one of two classes of electrical steel, are used as core material in high efficiency electrical devices such as large power transformers, distribution transformers and generators purchased to a large extent by utilities.
 The dumping and subsidization charges will be investigated by the Department of Commerce. The International Trade Commission has 45 days to determine preliminarily whether there is reasonable indication of material injury or threat of material injury to the domestic industry.
 Robert P. Bozzone, president and chief executive officer of Allegheny Ludlum, explained that the production of electrical steel requires a unique attention to technology and a superior knowledge of chemistry. Said Bozzone, "This is a high-tech industry requiring excellent skills and advanced equipment. We continually improve through research and development. We are proud of the metallurgical and production expertise of our dedicated work force. Our electrical steel products are better than or equal to any in the world. However, regardless of how efficient we are, we cannot compete against unfair trading by foreign subsidized producers in the U.S. marketplace."
 Robert L. Purdum, chairman and chief executive officer, Armco Inc., advised that grain-oriented electrical steel imports from other countries, particularly European producers, and imports of non-oriented electrical steel are also being monitored. "We are closely monitoring all of these imports and will act aggressively to safeguard our industry from dumping and subsidies, which are injuring our industry and workers," said Purdum.
 USWA President Lynn R. Williams said: "We are pleased to join Allegheny Ludlum and Armco as co-petitioners. The people who make this product are highly skilled steelworkers whose very livelihoods are at stake. We will not let unfair traders take these valuable jobs from American workers and their families."
 "The dumping and subsidy margins in these cases are huge," according to attorney David A. Hartquist of the Washington law firm, Collier, Shannon, Rill & Scott, representing petitioners. "We calculate the Japanese to be dumping at the rate of over 30 percent and the Italian dumping margin to be over 60 percent. The massive Italian government subsidies result in an additional countervailing duty margin of about 100 percent. The U.S. government will impose additional customs duties in these amounts, assuming our cases are successful," he said.
 According to the petition, U.S. industry sources estimate that of the approximate 82,000 tons of foreign electrical steel entering the U.S. market in 1992, roughly 70 percent was grain-oriented. Imports from Italy and Japan constituted an estimated 84 percent of the total grain-oriented electrical steel imported into the United States in 1992, with Japan the overwhelming leader at 69 percent.
 Data compiled by The Department of Commerce reflect import penetration of all electrical steel more than doubled between 1982 and 1992 from 8.2 to 17.4 percent. "The 17.4 percent figure jumped even more -- to 20 percent -- for the first half of this year," Bozzone said. "These data, combined with pricing and subsidy information we have collected, give us ample reason to believe that Japan and Italy are dumping product in the U.S. market."
 Dumping occurs when a product is sold in one market at a price that is considered "less than fair value." For example, if a foreign manufacturer sells its goods in the United States at a price below the foreign home market price, illegal dumping occurs. This practice creates market distortions and over time undercuts domestic producers' ability to effectively compete. The remedy for dumping is the assessment of antidumping duties equal to the difference between the foreign market price and the U.S. price of the product.
 Countervailing duties are imposed when a foreign government unfairly subsidizes products imported into the United States. The petition contends that the Italian government has provided massive subsidies to the Italian steel industry over the past two decades through direct loans, loan guarantees and other forms of preferential treatment; and that Italian production of electrical steel has been a beneficiary of this largesse. According to the petition, " ... these unfair subsidies provided to the Italian steel sector have been so pervasive and continuous, and the performance of this sector so poor, that the Italian steel industry remains dependent on subsidies to this day."
 Allegheny Ludlum and Armco Inc. are members of the Specialty Steel Industry of the United States (SSIUS), a Washington-based trade association representing domestic specialty steel producers.
 -0- 8/26/93
 /CONTACT: Bert Delano, 202-342-8889, or Meg Mullery, 202-342-8439, both for the Specialty Steel Industry of the United States/

CO: Allegheny Ludlum Corporation; Armco Inc.; United Steelworkers of
 America, AFL-CIO; Specialty Steel Industry of the United States ST: District of Columbia IN: MNG SU:

IH-KD -- DC006 -- 6072 08/26/93 10:35 EDT
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Publication:PR Newswire
Date:Aug 26, 1993

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