OBERSTAR CALLS LTV ANNOUNCEMENT A TRAGEDY FOR HOYT LAKES, NORTHEASTERN MINNESOTA

WASHINGTON--On the same day that the House of Representatives considers legislation to extend Permanent Normal Trade Relations to China (PNTR), Congressman Jim Oberstar reacted to the announcement by LTV Corp. that it plans to permanently close its Hoyt Lakes mine that produces taconite iron ore pellets.

"I was very deeply disappointed and saddened to hear that LTV Corp. plans to permanently close LTV Steel Mining Company in Hoyt Lakes, because this closure means that 1,400 people will lose their jobs. This is a terrible tragedy for Hoyt Lakes and Northeastern Minnesota. Taconite production is vital to Minnesota’s Iron Range, and LTV Steel -- the oldest continuously operating taconite mining company on the Iron Range -- has been a steady source of jobs, income, and quality of life for people in Northeastern Minnesota," Oberstar said. "The demise of LTV Steel is due to several factors. Most importantly, cheap slab steel and iron ore dumped on the U.S. market from Brazil, Russia, South Korea and other countries have driven the price for domestic iron ore into the ground. I, along with Minnesota’s steelworkers unions and the iron ore industry, have been sounding the alarm on the need to enforce U.S. trade laws and preserve American jobs for quite some time; unfortunately the warnings were not heeded in time to help workers at LTV Steel. I will work with the Mayor, the City Council and others to provide economic assistance to laid off workers and to attract other job opportunities to Hoyt Lakes."

Since the current steel crisis began in 1998, Oberstar has been urging the Clinton Administration to enforce existing U.S. trade laws, and most recently he attempted to leverage trade protections for iron ore workers with his vote on PNTR. The Republican leadership refused to consider his proposals, and Oberstar announced last night that he would oppose today’s legislation to extend permanent normal trade relations to China, which will guarantee China the same low-tariff access to U.S. markets that nearly every other country in the world has.

"The Erie Plant is the granddaddy of taconite facilities and has high operational costs compared with its competitors," Oberstar said. "In the global economy, it is necessary for all industries to constantly upgrade and improve their products and processes to remain competitive. Unfortunately, when U.S. trade laws are not effectively and vigorously enforced, American companies are disadvantaged and often unable to make the necessary investments in equipment and technology to remain competitive. Because of the downturn of steel prices, LTV has not invested sufficiently in modernization of its plant and has not been able to upgrade either pellet quality or process efficiency."

Oberstar was seeking two simple changes in existing trade law to treat taconite products like other steel products. First, Oberstar supports making taconite workers eligible for benefits under the 1974 Trade Adjustment Assistance Act, such as retraining and extended unemployment benefits, when they have been displaced by unfairly traded slab steel. Second, Oberstar wants to provide the taconite industry the same standing as basic steel has to bring trade cases against foreign producers of unfairly traded slab steel. Taconite, a high-grade raw material from which the impurities have been removed and from which steel products are made, is produced in the U.S. only in Northern Minnesota and Northern Michigan. Slab steel, or semi-finished steel, is a form of steel that replaces the blast furnace step in steelmaking. Despite the fact that taconite and slab steel have an identical function, the International Trade Commission has consistently ruled that taconite is not a "like and directly competitive product" with slab steel — a ruling that means taconite workers cannot bring trade cases against countries that unfairly dump slab steel in the U.S. market. The U.S. Department of Labor has made similar rulings denying taconite workers eligibility for Trade Adjustment Assistance benefits in slab steel cases. Other steelworkers unions can bring such trade cases when they have been displaced by other forms of foreign steel.