The following Letter to the Editor was published in the trade publication American Metal Markets, addressing the issue at Duferco Farrell Corp., which claims "Buy American" requirements are forcing it to lay off workers. USW Vice President Tom Conway explains why that's just not true:
To the Editor:
I wanted to take a moment to discuss the June 5 story on the "Buy American" provision of the recently passed economic stimulus package as it relates to the requirement that steel used on infrastructure projects be poured and melted in the United States and the alleged difficulty that Duferco Farrell Corp. claims this is causing it in meeting its market and in supplying customers.
The company is seeking a specific exclusion from the "Buy American" provision by lobbying the Pennsylvania congressional delegation and the Office of Management and Budget, charged with implementing the legislation. It is also working hard with the likes of the U.S. Chamber of Commerce and others who have a stake in importing into the U.S. market to create an image that this provision is the worst thing in the world for America. It has quickly become the poster child for anti-Buy American sentiment around the country and it's frankly getting a bit old hearing this story out of the company when it tells only half the story—and then it's further compounded when AMM chooses to report on it in the same manner.
The company is a joint venture between Duferco Farrell and OJSC Novolipetsk Iron & Steel Works (NLMK) of Russia. Duferco Farrell largely imports Russian-poured and -produced slab for rerolling in its plant in Pennsylvania. NLMK also owns an electric furnace shop at the Port of Indiana, Beta Steel Corp., which has U.S.-based melting capacity. According to representatives of the work force there, they are on severely reduced operations, as is the case with the rest of the domestic steel industry. Beta Steel can supply slab to Duferco Farrell and meet the requirements of the "Buy American" legislation, but according to the company this isn't the "best solution" as it prefers a 10-inch slab as opposed to the 8-inch slab produced at Beta Steel.
The USW has been in contact with union leadership at Local 1016 in Pennsylvania as well as Duferco Farrell chief executive officer Paul Fiore and chief financial officer Bob Miller on a number of occasions, and we have also met with their lawyers and lobbyists in Washington to understand their concerns. We have further contacted two domestic steel companies who stand willing to supply the company the 10-inch slabs it wants, at the specifications it says it requires, at a market-based price. Both those firms have advised Duferco Farrell of those offers and those offers stand today (see related story, page 1).
We have also had a number of discussions with Duferco Farrell's main customer, Wheatland Tube Co., to discuss its ability to modify its specifications to accept the 8-inch slab produced in Indiana, and it has made that accommodation and advised Duferco Farrell of that adjustment. Duferco Farrell now complains to us that the shipping costs from Indiana, Maryland and Alabama are cost prohibitive, and that's why they need to ship the slab to Pennsylvania from central Russia. That's what this has been about since the first day this issue was raised.
This is exactly why the legislation was written. Here we find ourselves with a foreign-owned company with U.S.-based operations that are idled or running at less than half capacity and the company insists that having to use U.S.-produced slab on the infrastructure work—which is a narrow sliver of the overall steel market and which will be funded through U.S. taxpayer dollars and designed to put Americans back to work—is a tremendous burden on it and will force layoffs of up to 600 USW Local 1016 members. This unnecessary and unwarranted threat is despicable. Instead, U.S. taxpayers who are anteing up to finally rebuild the nations crumbling infrastructure are being pressured by Duferco Farrell's Washington-based operatives to include a specific carve out for "their imported slabs" so the company can get at the U.S.-funded projects with Russian-made slab while USW members are laid off and Local 1016 members are continually threatened by Duferco Farrell management that they will lose 600 jobs if the company doesn't get its way.
Enough is enough of this nonsense. Duferco Farrell management needs to secure the slab it needs here, from either its parent company or the other offers on the table, and quit wasting everyone's time and money running around the country hiring lawyers and lobbyists whining about this issue and start rolling out some coils.
International Vice President