Subject: Re: Wall St. Journal--
From: [email-masked]
To: [email-masked]
Cc: [email-masked], [email-masked]
Date: Mon, 30 Apr 2001 03:12:00 -0700 (PDT)

Chris - I will forward the article to the steel distribution (jeff already 
has it).  I will distribute the steel study tomorrow when I receive it.  

Thanks,
Lisa

	Chris Long
	04/30/2001 10:07 AM
		 
		 To: Lisa Yoho/NA/Enron@Enron, Linda Robertson/NA/Enron@ENRON, Richard 
Shapiro/NA/Enron@Enron
		 cc: 
		 Subject: Wall St. Journal--

Lisa - Please get this to Jeff McMahon and the steel group.  Below are two 
press reports on the CITAC (the coalition we joined to fight 201) study on 
the effects of steel import quotas.  We will use this as a basis for lobbying 
campaign over the next month.  I will send you a copy of the study overnight.
Thanks - Chris

Look on p. A8 of the Wall St.Journal.  Both articles are attached.

April 30, 2001   <<...>>
Economy
Consuming Group Attacks Effort
By Steelmakers to Curb Imports
By ROBERT GUY MATTHEWS
Staff Reporter of THE WALL STREET JOURNAL
A grass-roots organization of consuming industries is mounting a campaign to
stop the steel industry's relentless push to sharply limit the amount of
cheap foreign steel allowed into the country, a move currently being
considered by President Bush.
Monday, the Consuming Industries Trade Action Coalition (www.citac-trade.org
<http://www.citac-trade.org/> ) is expected to release a report that says
that five times as many jobs will be lost in steel-consuming industries as
would be saved in the steel-making industry if quotas are passed. The report
also says that import limits would drive up the costs of steel and force
steel users, such as those serving the household appliance, construction,
automobile, machinery and equipment industry to lay off workers and cut
production.
"The thing to think about here is to look at when Washington is protecting
the narrow interests of one industry, they don't always see the broader
perspective," said Jon Jensen, chairman of Citac.
But steelmakers and steel unions counter that the consuming industries have
long enjoyed a period of extremely low steel prices and that it is unfair to
expect the steel producers to continue to bear the brunt just to keep steel
costs low. Hot-rolled and cold-rolled steel, two of the most widely used
steel products, have seen their prices plunge to some of their lowest prices
in decades at the same time consuming industries have been able to increase
production, hire more employees and lower the costs of goods because of a
rapid fall in steel prices.
"We have in this country bad trade policy," says Leo Gerard, president of
the United Steelworkers of America. "Clearly there are groups that are
taking advantage of this unfair trade policy and we are mounting a campaign
to stop this abuse."
There has always been tension between the steel industry and the users of
steel, with each side wanting the other to be less demanding about prices
and supply. But the acrimony has increased in recent months as the steel
industry suffers through a long string of quarterly losses eroding market
share because of increased availability of foreign steel, which is often
cheaper and seemingly endless in supply. In the past two years, about 20
steelmakers have filed for Chapter 11 bankruptcy-court protection.
The steel industry has pushed for import quotas with its powerful steel
lobbyists in Washington. Elected officials from steel-producing states have
also turned up the heat for protections to the industry. The Bush
administration has indicated that it would support a three- to five-year
moratorium on foreign steel imports for many steel products that are
domestically made, if the steel industry agrees to consolidate and
reorganize in order to become more competitive both in the domestic and
international markets.
Feeling outpowered, the consuming industries, a loose band of mostly small,
nonunion companies, including Stamco Industries Inc. of Euclid, Ohio, and
All American Mfg. Co. of Los Angeles, formed Citac nearly two years ago to
push their agenda and show that there are more users of steel than makers of
steel. Absent from the group are big appliance makers and automotive
customers, although those customers too are against allowing additional
quotas on imports.
The report says that if the most drastic of several import quota plans were
to be implemented, about 3,700 steel jobs would be protected. But 19,000 to
32,000 jobs in the steel-consuming sectors would be lost. The report also
says that the average pay for these lost steel consuming jobs is about $17
an hour.
Keith Busse, chief executive officer of Steel Dynamics Inc., based in
Butler, Ind., criticized the report and the effort to keep additional import
quotas from becoming law. "It's ridiculous for these guys to want to
continue to see the domestic steel industry to suffer. We depend on each
other," he says.
Write to Robert Guy Matthews at [email-masked]
<mailto:[email-masked]>

 <<...>> Steel users assert quotas would cost jobs
By Nancy E. Kelly
WASHINGTON, April 30 -- Steel users struck a blow against agitated suppliers
seeking import restraints on foreign steel by funding a study on job losses
under several import policies.
The report concluded that quotas would result in three times as many
steel-consuming industry workers losing their jobs as would be protected in
steel manufacturing.
Funded by a foundation affiliate of the Consuming Industries Trade Action
Coalition (CITAC), "Costs to American Consuming Industries of Steel Quotas
and Taxes" was written by the Trade Partnership, a Washington research
group. CITAC members include a number of large steel consumers and
associations, including Caterpillar Inc., Toyota Motor Manufacturing North
America Inc., Nissan North America Inc., the American Wire Producers
Association, the International Association of Drilling Contractors, the
Precision Metalforming Association and the American Institute for
International Steel.
The 30-page report, to be formally unveiled at a Washington press conference
Monday, based its findings on a "state-of-the-art" econometric model to
determine the costs to steel-using industries and consumers if the Steel
Revitalization Act (H.R.808) were passed into law. The bill, backed by the
United Steelworkers union, includes an import rollback to an average of
levels between 1994 and 1997; an expansion of the $1-billion steel loan
guarantee program to $10 billion; a 1.5-percent tax on all steel sold in the
United States; and a grant incentive program for merged steel companies to
maintain employment levels. The model also was used to determine the sole
costs of quotas alone.
According to its findings:
* The steel bill would protect no more than 3,700 steel jobs in
contrast to a loss of between 19,000 and 32,000 jobs in steel-consuming
sectors.
* Quotas outlined in the bill would cost tax consumers $1.35 billion
to $2.89 billion annually, or $732,000 per job protected in the steel
industry.
* Quotas alone would result in two to three times as many workers in
steel-consuming industries losing their jobs as would be protected upstream
in the steel industry.
* Quotas alone would cost consumers from $1.33 billion to $2.34
billion annually, or as much as $565,000 per steel job protected.
Asked about the ultimate costs to consuming industries if the domestic steel
industry was substantially reduced, Laura M. Baughman, who authored the
study with Joseph F. Francois, said that CITAC wanted a healthy domestic
steel industry. "CITAC is not for putting the domestic steel industry out of
business, but they don't think import quotas are the answer," she said.
"Imports are not the problem--other things are the problem."
The study said that technology was driving the long-term change in the
industry while the steel ranks had been blaming other factors, including
imports. Asked why modern, efficient mini-mills like Nucor Corp. and Steel
Dynamics Inc. also were citing imports as the cause of severe pricing
declines, Baughman had no hard answer. "I find that very sad," she said.
"These are companies that understand the value of imports to the U.S.
economy and have relied on imports themselves for raw materials. I don't
know."
Baughman emphasized that the Trade Partnership had no political agenda and
defended the model as rigorous and not easily manipulated. "It's a model
that takes into account the entire economy and the effects on everything
from agriculture to banking in a change on steel imports, using basic input
and outputs," she said.