Word: steels
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...American steel companies charge that the Europeans are using cutthroat tactics, including predatory pricing and domestic subsidies, to sell their products in the U.S. at less than it costs to manufacture them. They maintain that the Europeans can sell their products cheaply because many producers are either outright government owned or else heavily subsidized...
Last week, almost five months to the day after the industry's complaints were filed, the administrative clock ran out, and the Commerce Department issued a preliminary ruling that foreign steel producers from seven European nations, including Britain and West Germany, as well as producers in South Africa and Brazil, were selling in the U.S. market at unfairly low prices. Effective immediately, importers of their goods will have to post bonds on shipments pending final determination of damages later this year. Said Viscount Etienne Davignon, European Community commissioner for industry in Brussels, in response: "It has been quite clear...
...been meeting privately with European Community officials in a search for some sort of agreement that would head off the need for action by the Commerce Department. Washington's preferred solution was a voluntary pledge by the Europeans to limit exports. Since 1978 the Japanese have kept their steel sales in the U.S. to approximately 6 million tons annually. It was hoped that such a self-restraint deal could be used by the Administration to persuade the American producers to with draw their complaints...
...point last week, European negotiators seemed ready to limit their share of the American steel market at least somewhat. But when Commerce Secretary Malcolm Baldrige met in New York City with a group of top steel-industry executives to try to sell them on the idea, they were not interested...
...Steel's woes are not due entirely to imports. Many of its troubles are made in the U.S. Perhaps the most important difficulty the industry faces is excessively high wages. Robert Crandall, a senior fellow of the Brookings Institution, estimates that American steel companies are now paying 75% more than the wages paid in other U.S. manufacturing industries. The average union wage and benefit payment: $22 an hour. Says Crandall: "That is the industry's biggest problem...