Blog

Leo W. Gerard

 By Leo W. Gerard
USW International President

A screwy thing happened after the United Steelworkers and eight domestic steel producers won their trade case late in December against Chinese manufacturers of the steel pipe used for oil and gas drilling.  

Instead of describing it as an important victory for U.S. industry and workers, one in which they proved to the U.S. International Trade Commission (ITC) that China violated international trade rules, the media characterized it as Americans unnecessarily picking a fight with the Chinese.

What else is new? It’s exactly what happened in September when the United Steelworkers won tariffs in a trade case regarding imported Chinese tires.

What’s particularly disturbing about this stance from the media is that it occurs only when a trade case involves manufactured goods. The media strongly supports protections for copyrighted material – movies, music etc.  The media have made clear they oppose Chinese piracy of intellectual property – you know, like the written and filmed products that media members produce. 

But their reaction is completely different when the Chinese violate international rules regarding manufactured goods. Then, the media blame the victims — the U.S. industries and workers – the same way defense attorneys accuse rape victims. 

Here, for example, is the Washington Post  contending that the ITC decision to impose duties of between 10.4 and 15.8 percent on Chinese pipe heightened trade hostilities between the U.S. and China:

“The current tensions began in September, when the United States imposed a staggering 35 percent import fee on tires from China.” 

The Dow Jones Newswire in a story by Henry J. Pulizzi also charged the U.S. with provoking the Chinese by imposing duties, beginning with a reference to the steel pipe decision:

“The ruling adds more tension to the U.S.-China trade relationship. Ties between Washington and Beijing are already frayed by the Obama administration’s imposition of duties on Chinese tire imports and China’s criticism of U.S. moves as protectionist.”

These reporters act like the decisions themselves initiated animosity between the U.S. and China over trade.  That completely disregards how the process starts – with China violating international trade rules it had agreed to obey in ways that cause U.S. businesses to collapse, factories to close, thousands of U.S. paper workers, tire workers, steelworkers and others to lose their jobs, and their communities to suffer.

We could sit back and just take it and allow U.S. industries to die, one after another, while China keeps its citizens employed by providing subsidies and supports forbidden under international law to its industries and then selling the goods in the U.S. at prices below production costs.

But that doesn’t sit well with most Americans. They believe their country should enforce trade rules. That is what U.S. industry and unions are demanding. That is what occurred in the tire and steel cases. That is what the United Steelworkers and paper manufacturers are seeking in a trade case to be heard later this year. 

Demanding adherence to the rules isn’t protectionism. And the media need to stop saying it is. Here’s how Dan DiMicco, chief executive officer of Nucor, the nation’s second largest steelmaker, explained it, “It is not protectionism when countries are held accountable for the agreements and obligations they freely entered into to have access to the USA and world’s markets.”

In addition to falsely making this a protectionist fight, the media wrongly contend the tariffs were political. Dow Jones, for example, tried to make the unanimous ITC decision in the steel case political, writing: 

“The ITC is an independent federal agency tasked with investigating the impact of alleged ‘dumping’ of foreign products on U.S. industries. While its six commissioners are split evenly between Republicans and Democrats, the decision fits with the Obama administration’s push to address U.S. manufacturers’ concerns about Chinese competition.” 

Dow Jones implies here that somehow Obama managed to strong-arm all three Republican ITC members to vote his way in this case. None of the stories suggesting politics were involved in the tariff decisions note that Republican Sen. Richard Shelby of Alabama and nine Republican Congressmen joined dozens of Democrats in signing letters to the ITC supporting the duties. 

Nobel Prize-winning economist Paul Krugman has written that failure to enforce trade laws and compel China to stop manipulating its currency could cost the U.S. 1.4 million jobs over the next couple of years. He describes China’s behavior as mercantilist – supporting industry for export of goods to maintain high employment and trade surpluses.

He quoted economist Paul Samuelson:

“With employment less than full. . . all the debunked mercantilist arguments” – that is, claims that nations who subsidize their exports effectively steal jobs from other countries – “turn out to be valid.”

That is what China is doing to the U.S. – stealing jobs.

The U.S. doesn’t have to let it happen. America can enforce international trade laws. It works. Shortly after President Obama imposed the tire tariffs, Cooper Tire & Rubber Co. announced plans to add capacity to its Findlay, Ohio plant and hire up to 100 workers. Other U.S. tire plants began recalling laid off workers.

American manufacturers, workers and communities are the victims of unfairly traded Chinese exports. They’re fed up with the media blaming them when all they’re asking for is justice.

Leo W. Gerard

By Leo W. Gerard
USW International President

Defying popular stereotype, CEOs and labor representatives sat on a panel and largely agreed on major issues confronting industry and working people.

It happened Monday, Nov. 30 as CNBC taped “Meeting of the Minds: Rebuilding America” in a hall at Carnegie Mellon University before an audience of nearly 600 students, businessmen, steelworkers and other trade unionists.

For the broadcast Dec. 2 at 8 p.m., host Maria Bartiromo said the Steel City of Pittsburgh was chosen because:

“It was here that America’s soul was forged.”

She assured the audience that the panel of speakers – Dan DiMicco, President and CEO of Nucor Corp.; Bill Ford Jr., Executive Chairman of Ford Motor Co.; Jeff Immelt, Chairman and CEO of General Electric; John Engler, President and CEO of the National Association of Manufacturers; U.S. Labor Secretary Hilda Solis, and me  — would tell them how to put America back on track.

Since precious few Americans, even those in the same political party, agree on how to realign America, that’s when a typecast smack down between CEOs and unionists might have begun.  

But it didn’t. That’s because on the most crucial issues, like manufacturing strategy and trade policy, the panel pretty much concurred.

Really.

For example, this is the United Steelworkers’ position on manufacturing strategy: America needs one.

The lack of a strategy handicaps the U.S. when it attempts to compete with virtually every other industrialized nation in the world. They have policies. They’ve decided which manufacturing areas they’re going to emphasize and support. And they do that with taxes, tariffs, loans, grants, even higher education guidelines.

As I said that night:

“We need to have a plan. All the other major countries in the world have plans. I am not mad at China. I am mad at us. They are doing what they need for their people.”

Bill Ford and Dan DiMicco joined that position.

Ford said, for example, that he met recently with the president of another country where his company manufacturers cars. That president, who he did not name, asked, “How can I help you?” Ford said that country already had a manufacturing strategy, so he could have a conversation with that government. But, he said, today, in the United States, that same conversation “is almost impossible because there is no policy.”

DiMicco agreed. He stressed that a manufacturing agenda must be designed, and he said he believes that is now being done with the support of President Obama’s administration. “We need to create jobs for 30 to 40 years, not the short term,” he said.

Here’s something else we agreed on: trade laws must be enforced and improved. The failure to do so has led to huge U.S. trade deficits and the migration of millions of good, middle-class manufacturing jobs overseas.

Several USW officers went to Washington, D.C. the day after the CNBC show taping to testify before the U. S. International Trade Commission in an attempt to save the U.S. industry that makes specialized steel pipe that is called oil country tubular goods. Between the end of 2008 and September of 2009, this industry lost 2,421 workers because of a killer cascade of unfair Chinese imports.

The USW union is joined in this petition by U.S. Steel Corp., Maverick Tube Corp., Evraz Rocky Mountain Steel, TMK IPSCO, V&M Star LLP, V&M TCA, and Wheatland Tube Corp.  Now there are a few more CEOs who agree with the USW.

During the CNBC taping, Immelt conceded that the policy of trying to put factories on barges to ship them overseas in search of the lowest labor costs, “has turned out to be not such a good idea.” For manufacturers like GE, and the  U.S. workers who lost those jobs, America must enforce trade laws and create a manufacturing policy to establish the  incentives essential to keep those factories at home in the U.S.

I have been ranting about trade for a long time. Rarely have I heard someone as angry about it as I am. But DiMicco clearly is. Listen to what he told the CNBC audience: 

“You should be a lot ticked off about the failed trade policies in Washington, D.C. . . . That has destroyed the middle class in this country.”

One of those from the audience permitted to ask the panel questions seemed more ticked off about the trade union movement than failed trade policies. She asked Ford if shedding the United Auto Workers would enhance his bottom line.

He said no:

“We are very happy with our union work force. There is a misconception that we want to get rid of the union.”

He said Ford collaborates with its union workers. He noted that he is a fourth generation Ford and walks through plants greeting many fourth generation UAW workers who are committed to Ford’s success. “Together we have gotten a lot done,” he said.

Union leaders have no qualms about negotiating with CEOs like Bill Ford for a fair split of the profit-pie in collective bargaining. But first, working together, we must make sure – with a manufacturing strategy and strong, enforced trade laws – that there is a pie.