Allegheny Technologies Inc. CEO Robert Wetherbee said in an op-ed written for the Wall Street Journal last week that the company’s Midland plant is "hemorrhaging money" due to President Donald Trump’s 25 percent tax on imported steel.
MIDLAND — A Pittsburgh-based metals manufacturer may be forced to close its Beaver County facility and lay off at least 100 local workers without an exemption from Trump-imposed foreign steel tariffs.
Allegheny Technologies Inc. CEO Robert Wetherbee said in an op-ed written for the Wall Street Journal last week that the company’s Midland plant is "hemorrhaging money" due to President Donald Trump’s 25 percent tax on imported steel.
Trump’s economic policies led ATI to reopen the idled Midland steel plant two years ago, and company leaders are urging the administration to keep its industry promise.
"The administration imposed tariffs for good reason," Wetherbee said. "Numerous countries have heavily subsidized their steel manufacturing and flooded the global market with low-cost steel. Many U.S. plants, including some of ours, closed."
But the tariffs made ATI’s nickel-rich stainless steel slabs, imported from Indonesia, unreasonably expensive, Wetherbee said. The Midland plant, which employs 100 workers directly and another 200 indirectly, specializes in cold-rolling 60-inch stainless steel sheet used in products ranging from kitchen appliances to car parts.
"Only three companies in the entire country can produce the slabs we need, and all three are direct competitors, which import raw material from Russia and elsewhere," he said. "They have zero interest in helping us prosper."
One competitor’s quote for raw materials was higher than ATI’s finished product, he said.
Unless the administration approves this newest exclusion request to bring in 150,000 tons of penalty-free stainless steel — 6 percent of the total U.S. stainless-steel market — the plant will shutter within months.
"Hundreds of Pennsylvanians will lose their jobs,’ he said. "Mr. President, we implore you: Save our jobs."
Midland’s plant reopened just two years ago as a joint venture with China’s Tsingshan Group, the world’s largest stainless steel producer. In 2019, Trump denied ATI’s first request seeking an exemption on the 300,000 metric tons of low-cost Indonesian steel the venture imports annually.
"The administration said they believed it was available from other domestic supply sources," said Danielle Carlini, general manager of operations at the Midland plant and A&T Stainless operator. "The reality is it’s not an ideal situation to rely on your direct competitor for raw material."
Since the tariffs were imposed in March 2018, the joint venture has drastically curtailed production capacity and paid close to $40 million in penalties, Carlini said. ATI’s decision to reduce the exemption request by half — from 300,000 tons to 150,000 tons — was made as a last resort. The venture will still have to supplement with high-cost domestic suppliers.
"For the time being, we can live with it," Carlini said. "We have been paying these tariffs because we want to support our customers and we believe we should have an exemption. We want to be respectful of the process before doing anything drastic that affects the employment of our great, hard working and talented employees."
Wetherbee said the Trump administration should protect American workers by granting more exemption requests. Last year, NLMK Pennsylvania laid off nearly 100 workers at a Mercer County steel plant after failing to secure an exemption, with more layoffs possible.
"The goal of tariffs is to bolster the U.S. steel industry," Wetherbee said. "If a company proves it has no viable alternative to imports, and that tariffs would lead to layoffs and plant closings without generating any new business for domestic mills, the administration should eagerly grant exclusions."
Trump's pledge to revitalize the steel industry earned him votes in key swing states like Pennsylvania and Ohio four year ago, but the benefits of his policies have been fleeting at best. It’s unclear if voters in once steel-heavy regions like western Pennsylvania will reward the president for taking on foreign steel, or penalize him for ongoing layoffs and plant closures.
ATI’s latest exemption request was filed last fall. Carlini wants her employees to know the company is doing everything it can to keep the paychecks coming.
"They’re concerned about job security," she said. "I want them to know we have done everything within our power, and I think the most difficult thing is we're doing a great job. We have served our customers extremely well with a high-quality product. This is such a large tariff, and we sometimes feel powerless. They're a great group of people; they deserve to be employed."
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January 14, 2020 at 04:10AM
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Midland steel plant to close in months without tariff exemption, company says - The Times
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