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Author: Subject: Trump steel tariffs may leave these U.S. steelworkers jobless

Zen Peach





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  posted on 3/10/2018 at 10:29 AM
FARRELL, Penn. (Reuters) - Mick Lang has been a steelworker for nearly 40 years and voted for businessman Donald Trump in the hopes he would bring about a renaissance for the long-suffering U.S. steel industry. Now he worries President Trump’s tariffs on imports of the metal will cost him his job.

“This is not what I voted for. I voted for Trump because I thought he’d straighten things out, not do something like this,” said Lang, 59, a third-generation steelworker, whose son also works at the same steel mill in Farrell in western Pennsylvania’s Mercer County.

The county voted for then-Republican candidate Trump by more than 24 points in the 2016 U.S. presidential election. Some Republican strategists said Trump’s tariffs appeared partly to be timed to sway voters in Pennsylvania steel country, where a special election is being held for a U.S. House of Representatives seat next Tuesday.

Trump is scheduled to visit Moon Township about 60 miles southwest of Farrell on Saturday to support the Republican candidate and he is expected to be warmly received in an area he also won handily in 2016. U.S. steel companies such as U.S. Steel Corp (X.N) and AK Steel Holding Corp (AKS.N) - seen as winners thanks to the president’s actions - have lauded Trump’s tariff on imported steel.

U.S. Steel said it would restart one of two idled blast furnaces at an Illinois steel plant, creating up to 500 jobs.

America is the world's largest steel importer, buying about 35 million tons in 2017.

But Lang is one of around 780 workers at the Novolipetsk Steel PAO (NLMK) (NLMK.MM) mill, NLMK’s U.S. subsidiary which imports around 2 million tons of steel slabs annually from its Russian parent company. The slabs that the mill rolls into sheets for customers including Caterpillar Inc (CAT.N), Deere & Co (DE.N) Harley Davidson Inc (HOG.N) and Home Depot Inc (HD.N), are almost impossible to acquire from U.S. steel producers.

Bob Miller, Chief Executive Officer of NLMK’s U.S. unit, said if his company’s customers refuse to accept a 25 percent price hike as a result of the tariffs, nearly 1,200 workers could eventually lose their jobs - and the ones in Farrell would be the first to go when supplies of imported slabs run out.

The U.S. steel industry employed about 147,000 people in 2015, according to the Commerce Department's Bureau of Economic analysis. Manufacturers that need steel employ about 6.5 million people each year and the construction industry 6.3 million.

IRONY
Miller said tariffs will also force NLMK to shelve planned $600 million investments in plants in Pennsylvania and Indiana, around $400 million of which was earmarked for upgrading antiquated equipment at its Farrell plant.

Trump has stood by the tariffs, despite resistance from his fellow Republicans and other countries, which have vowed to respond with levies of their own. On Thursday, Trump pressed ahead with the imposition of 25 percent tariffs on steel imports and 10 percent for aluminum.

Some steel executives such as Miller say this is the ultimate irony: by acting ostensibly to protect U.S. steel jobs with sweeping tariffs, Trump will also kill off some steel jobs.

“The workers here in Farrell are on the front line,” Miller said. “This policy is picking winners and losers and unfortunately, we are the losers.”

The tariffs are good for steel producers that melt and produce their own steel. But for those like NLMK, which is reliant on imported raw materials, they could prove catastrophic.

The mill is the largest employer in Farrell and accounts for more than one fifth of the town’s tax base. Mercer County has a poverty rate that is nearly double the national average.

The area was America’s steel heartland, with mills dotting the landscape until the industry’s decline began in the 1970s because of an increase in global competition. The mill owned by NLMK has existed since the beginning of the 20th century, but experienced two lengthy shutdowns and mass layoffs in the 1990s.

Its blast furnace was sold for scrap and instead of producing steel, its current crop of workers heat 25-ton imported steel slabs to a glowing-orange temperature of 2,400 degrees fahrenheit (1,316 Celsius) before rolling them down in some cases to as thick as a few sheets of paper.

Amid blasts of steam, intense heat, dirt and noise, the mill’s 600 union-represented workers earn up to $27 per hour, a solid middle-class wage.

Terry Day, local president for the United Steelworkers union, said the 1990s shutdowns convulsed the community and resulted in a spate of suicides and divorces.

“This time it will be much worse,” said Day, 53, who experienced both shutdowns. “Back then there were other jobs to go to, but now there’s nothing else here.”

“It would be devastating.”

Steel customers ranging from automakers General Motors Co (GM.N) - which makes its Cruze sedan in Lordstown, Ohio, around 20 miles west of Farrell - and Ford Motor Co (F.N) to soup maker Campbell Soup Co (CPB.N) and brewer Molson Coors Brewing Co (TAP.N) are expected to lose, as tariffs will allow domestic steel producers to raise prices.

But likely job losses within the steel industry run counter to Trump’s professed aims of bringing back manufacturing jobs.

“There is a substantial number of people in the steel industry that could lose their jobs as a result of tariffs,” said metal analyst Charles Bradford of Bradford Research.

Farrell can ill afford to lose its NLMK steel jobs.

The town’s population of under 5,000 is less than a third of what it was in 1920. As of June 2017, there were around 11,000 steel jobs in Pennsylvania, 2 percent of the state’s 546,000 manufacturing jobs. Mercer County had 5.5 percent unemployment in December - above the state rate of 4.8 percent and the national rate of 4.1 percent.

The Farrell mill was originally owned by a U.S. firm that went bankrupt in 1992 and was subsequently owned by British and Swiss companies before the Russians bought in back in 2006. Since then, NLMK has invested around $1 billion in its U.S. operations, U.S. CEO Miller said.

Miller is working to lobby the Trump administration to follow the precedent of former Republican President George W. Bush’s administration, which allowed quotas for slab steel in 2002 rather than applying tariffs as it did for products that were domestically produced.

Those quotas allowed the Farrell plant to keep operating and Miller hopes the Trump administration will follow suit.

The mood in Farrell is grim and fearful. Truckers coming to pick up coils of rolled steel ask when the mill will go out of business and plant manager Bill Benson says workers keep asking him: “What on earth is Trump thinking?”

https://www.reuters.com/article/us-usa-trade-steel-jobs/trump-steel-tariffs -may-leave-these-u-s-steelworkers-jobless-idUSKCN1GL2V9

 
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Zen Peach



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  posted on 3/10/2018 at 12:22 PM
maga

 

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Maximum Peach



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  posted on 3/13/2018 at 08:25 AM
Funny, United Steel Workers Union President Leo Gerard is strongly supporting and encouraging tariffs.

But let's examine this:

quote:
But Lang is one of around 780 workers at the Novolipetsk Steel PAO (NLMK) (NLMK.MM) mill, NLMK’s U.S. subsidiary which imports around 2 million tons of steel slabs annually from its Russian parent company. The slabs that the mill rolls into sheets for customers including Caterpillar Inc (CAT.N), Deere & Co (DE.N) Harley Davidson Inc (HOG.N) and Home Depot Inc (HD.N), are almost impossible to acquire from U.S. steel producers.

Bob Miller, Chief Executive Officer of NLMK’s U.S. unit, said if his company’s customers refuse to accept a 25 percent price hike as a result of the tariffs, nearly 1,200 workers could eventually lose their jobs - and the ones in Farrell would be the first to go when supplies of imported slabs run out.


Question, why is it "almost impossible to acquire [said steel] from US steel producers"? Because not enough is made here? Well US Steel just announced that they are reopening the Granite City Illinois blast furnace to make more steel so we don't have to import it.

And what is this "if his company's customers refuse to accept a 25% price hike....nearly 1,200 workers could eventually lose their jobs"? So their customers just no longer need the steel then? They will just say, no thank you NLMK Steel, we're good here? Assuming they will in fact still need steel for their products then the production and jobs just shift from point A to point B the important thing being is the jobs stay in this country.

This is what it looks like any time anything tries to get changed. We've been screwed for 30-40 years with outsourcing and foreign material and labor negatively impacting this country and here we have something that tries to change course slightly, this isn't even extreme really, and all anyone can do is say it won't work and will make things worse. I guess we should just leave everything alone and never try to do anything different.

 

Maximum Peach



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  posted on 3/13/2018 at 12:52 PM
trump will not listen to advise from those who know better, because he believes he is the smartest person in the room "always" [he will never be]. economic advisor cohn and now tillerson [who has called trump a moron] have resigned. why do you think that might be??.
 

Zen Peach



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  posted on 3/13/2018 at 03:04 PM
quote:
This is what it looks like any time anything tries to get changed. We've been screwed for 30-40 years with outsourcing and foreign material and labor negatively impacting this country and here we have something that tries to change course slightly, this isn't even extreme really, and all anyone can do is say it won't work and will make things worse. I guess we should just leave everything alone and never try to do anything different.


I know how you feel about this nebish, but I'm not sure I agree. Yes, we have lost manufacturing jobs (probably as many to automation), but we have also gained access to foreign markets for our goods. It's a 2-way street. You complained that Harley-Davidson built a plant in Asia to serve that market - while you expect foreign car makers to do the same here. Caterpillar is HQ'd in Illinois, but it is a global business with plants and customers all over the world. My brother-in-law works for them, and he just traveled to South Africa where the gold mines there use Cat generators and are looking into investing in Cat solar power. Whenever changes to NAFTA or tariffs come up, I see articles from Illinois businesses that are afraid of losing the inroads they have made in foreign markets.

I don't really think tariffs are the way to "solve" this - there are impacts on the whole economy, usually not good impacts either. Just read an article today about the last steel beer keg maker in America - they said the tariffs will not help them, as it will drive up the price of steel and make it even harder for them to compete. They mentioned that raw steel prices are impacted by the tariffs, but finished products are not - so beer kegs coming into the country are not impacted by the tariffs.

We are a consumer economy, which is why we depend on a lot of foreign products to meet our demand. The keg maker said people are willing to pay a premium for US products, but there is a limit to how much they will pay.

 

Maximum Peach



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  posted on 3/14/2018 at 09:25 AM
It is important to know that I was not being critical of Harley for building that plant in Thailand rather than exporting bikes from here for sales there. Many people I talk to assume that US brands sold abroad are exported from here, and while that is true, it is not always true. So here, when that plant gets up and running and the localized supply chain that feeds that plant, Asian sales will do nothing to help workers or production facilities here. So I was pointing this fact out. Every country should operate in their best interest. For years, foreign countries have put trade barriers up against our products while we have opened our doors free of charge, they take advantage of us and it is a wealth transfer to multinational corporations and foreign countries that result.

Yes, Cat is a critical piece of US industry and they are global naturally and have a large presence around the world. They can sell into foreign countries, which is good for them, but same thing, alot of those sales aren't exports. Some of it is, but with facilities all around the world, equipment made here isn't the same equipment sold in Asia. Plus, Cat doesn't even have all of the sales in our market. On construction products I see brands such as Hitachi and Komatsu and other foreign brands are just as prevalent as Cat. So what if Cat was able to build more and sell more here in absence of those foreign earth movers? Their sales globally could decrease, but there is opportunity for that to be offset by a sales increase here.

There needs to be a broad economic vision and plan to go along with selected trade barriers - to re balance everything. Those imported kegs, they should face trade barriers to get more production here either by existing companies or getting more companies to make it here.

It is all about getting more investment here either from US corporations or foreign corporations. Corporate interests do not always align with out national interests or the interests of our workers. And it isn't the corporation's duty to do so, it is the duty of our government to create that framework.

One thing to keep in mind, anyone who supported Bernie Sanders would you be against tariffs if he put them in place? Because he spoke about much of the same things regarding outsourcing and unfair trade and dumping when campaigning and would've pushed for restrictions just as Trump has. So what then, would it still be bad policy? It was a big part of his platform.

The trade deals we have entered into have kept wage growth depressed as US corporations have chased cheap labor abroad and thrown US workers to the curb. They have raised the standard of living in foreign countries while stagnating wage growth here. We should reverse that, we want wages to increase right? This is the way to do that and have people adding value producing things that justifies a "living wage". We sell about 17 million autos in this country every year, in 2012 we imported 8 million just from the top 5 largest countries. To me, that is a whole lot of cars we can be making here and offering good paying jobs to our workers. That is the complaint right? Too many people working at Walmart and can't make ends meet and can't afford this or that. Rather than mandating Walmart increase their pay and benefits for low skill, low value work, let's create jobs that actually add value and produce and justify good wages and benefits. That is what re balancing of trade can do. And this is the perfect time to be doing it when the economy has strength and company balance sheets are strong.

 
 


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