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For Immediate Release WEIRTON, W.VA. – Weirton Steel Corp.'s chief executive officer today said the domestic steel industry has benefited from the first year of President Bush's tariffs on steel imports and has helped keep the steelmaker out of bankruptcy. On March 5, 2002, Bush imposed descending tariffs on 16 types of steel imports that Weirton Steel President and Chief Executive Officer John Walker said made a positive difference for the domestic steel industry. The president issued the tariff relief under Section 201 of the Fair Trade Act. "There is no question that without the 201 relief, many more steelmakers would have filed for bankruptcy protection while others would have shut down their operations. The tariffs prevented further historic import surges and gave our industry a chance to recover," Walker said. "Some domestic steel producers have returned to profitability while others, yet to become profitable, have shown marked financial improvements over the past year." Walker said Weirton Steel's most important action last year to avoid bankruptcy was implementing a corporate restructuring plan that reduced jobs, lowered its debt, improved its liquidity and obtained vendor investment. The restructuring plan, crafted by management and the Independent Steelworkers Union, significantly reduced the company's costs. "Our restructuring was crucial, but we needed other things to fall in place to help us, such as the tariff program. Combined, these initiatives kept us moving forward," Walker explained. "The added expense of tariffs forced many foreign steel companies to slow their steel exports to the U.S. Before the tariffs, steel prices in domestic markets crashed to record lows. Admittedly, price recovery has been slow, but prices are far better today than before the tariff program began." When Bush imposed the tariffs, he did so while expecting the domestic steel industry would restructure itself to become more competitive. "In the first year of the tariff program, the industry has made good progress toward consolidation and restructuring. In addition to Weirton's restructuring and current cost-reduction campaign, we witnessed three acquisitions and two others are pending. Clearly, the tariff relief – if let alone – will result in a more efficient, more competitive U.S. steel industry," Walker noted. Walker added Bush's steel program also has arguably prompted the most serious international discussions on steel issues. Over the past 12 months, the U.S. and many other steel producing nations have held talks aimed at reducing worldwide overcapacity of steel production and taking a firm stand on government subsidies to steel mills which creates unfair advantages. On March 20, the tariffs drop to 24 percent and a year later to 18 percent before ending in March 2005. In September, halfway through the tariff program, a required hearing will be held before the U.S. International Trade Commission to determine the effect of the tariffs on domestic steelmakers and steel-consuming companies. Following the hearing, Bush has the option of continuing the tariffs through March 2005 or prematurely ending them. "Many foreign steel companies and domestic steel consumers will be out in full force in September demanding the government stop the tariff program. It's our industry's job to be ready to prove the tariffs have benefited our industry and its workers so the program will continue through its originally assigned duration," Walker commented. "In addition, we will continue urging the administration to be very careful in considering current and future requests from other nations and domestic steel-consuming companies for certain steel imports to be excluded from the tariff program. In specific cases, granting exclusions erodes the effectiveness of the tariff program and harms domestic steelmakers." Walker added that Weirton Steel also is reminding the administration to keep a close check on those countries not included in the tariff program so they do not take advantage of their status and flood U.S. markets. Weirton Steel's trade attorney, Roger Schagrin, will participate today in providing a steel industry progress report for Congressional staff members who have steel and/or trade responsibilities. Other speakers at the Washington, D.C., forum include members of Congress, representatives from steel trade organizations, a university professor specializing in international business and an official from the United Steelworkers of America. Weirton Steel is the seventh largest U.S. integrated steel company.
Weirton Steel Corp. Media Contact:
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