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press releases: 2006 automotive suppliers applaud congressional letter on steel prices Release Date october 05, 2006 RESEARCH TRIANGLE PARK, N.C. – The Motor & Equipment Manufacturers Association (MEMA), North America’s largest and oldest trade association for motor vehicle product manufacturers, commends the more than 50 members of Congress who sent a letter to the International Trade Commission (ITC) urging the ITC to consider the restructuring of the steel industry. The letter stresses the importance of steel products to the competitiveness of the automotive supplier industry during an upcoming review of current antidumping (AD) and countervailing (CVD) duty orders on certain corrosion resistant carbon steel flat products. “We greatly appreciate the leadership of Rep. Joe Knollenberg (R-Mich.) and the others who signed the letter,” said Ann Wilson, MEMA’s vice president of government affairs. “The steel industry has restructured, and it is time to eliminate these unnecessary protective orders that don’t reflect the current economic reality of today’s steel industry.” Based on information from the Center for Automotive Research, the automotive industry accounts for 41 percent of domestic steel consumption, and for that reason, steel remains one of the leading raw material cost challenges facing the motor vehicle suppliers. Since 2004, seven supplier companies with more than $100 million in assets have begun bankruptcy proceedings. Each company has specifically cited high steel costs as a primary pressure and element in their bankruptcies. According to MEMA, the protections put in place by the AD/CVD orders on corrosion resistant steel are no longer necessary. Companies like Nucor and U.S. Steel have vastly increased their cash holdings, with Nucor increasing from approximately $350 million at the end of 2003 to approximately $980 million at the end of 2005 and U.S. Steel increasing from approximately $316 million at the end of 2003 to almost $1.5 billion at the end of 2005. “The United States continues to implement trade policies that restrict access to imported steel, even though the domestic industry can only supply up to 75 percent of U.S. demand,” Wilson continued. “The resulting steel prices are higher than they would be without existing domestic trade policies and we urge the ITC to end its current antidumping and countervailing duty orders on corrosion resistant carbon flat steel products. Without access to dependable supplies at competitive prices, the automotive parts industry will continue to suffer.” MEMA represents more than 700 motor vehicle product manufacturers with nearly 12,000 U.S. plant locations and 1.3 million workers. Together, these companies keep the U.S. automotive and truck industry supplied with the components that enable it to produce some 17 million vehicles annually and keep the 232 million vehicles on the road with replacement products and services. MEMA supports its members through its three market segment associations: Automotive Aftermarket Suppliers Association (AASA), Heavy Duty Manufacturers Association (HDMA) and Original Equipment Suppliers Association (OESA). Contact information: Margaret Beck
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