Ford Motor Co., the second-largest U.S. automaker, and Delphi Corp., the world’s largest auto parts company, asked the U.S. ITC today to lift duties on steel imports from Brazil, Japan and Russia while steelmaker opposed the move.
Executives from the two companies joined their automotive industry peers at an International Trade Commission hearing in Washington, saying the five-year- old U.S. tariffs on hot flat-rolled steel from those nations have led to record steel prices, which are squeezing their profits.
‘I cannot exaggerate the degree to which the steel supply situation is affecting Ford’s business,’ said Jeff Engel, the executive director for purchasing at Dearborn, Michigan-based Ford. ‘It is consuming the attention of every senior officer.’
The share of flat-rolled steel used in the U.S. that was bought overseas has dropped to 7.1 percent from 15 percent since the duties were imposed. Prices jumped from $260 a ton in March 2002 to a record $756 in September 2004, but has since fallen. Prices hikes brought record profitability to steel producers, which had seen from multiple bankruptcies in their ranks since 1999.
‘There’s no doubt that last year was an excellent year,’ U.S. Steel Corp. Chief Executive John Surma said. ‘But a single good year will not be enough to make you whole, we have a long way to go to ensure our long term health.’
U.S. Steel and Nucor Corp., the two largest American steel producers, generated record profits last year because of the higher prices. Today they were joined by two-dozen lawmakers defending the tariffs, and said removing them would lead to more cheap imports. The U.S. already ruled those nations subsidized their industries and ‘dumped’ steel at bargain prices.