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FOR IMMEDIATE RELEASE
May 17, 2001 		PRESS CONTACT:
202-224-6101
 

ROCKEFELLER INTRODUCES LEGISLATION CRITICAL TO SAVING STEEL INDUSTRY

WASHINGTON, D.C. – As part of his comprehensive efforts to save our domestic steel industry from extinction, Senator Jay Rockefeller (D-WV) today introduced the "Save the American Steel Industry Act of 2001." The bill will provide economic relief for companies facing consolidation and mergers -- a move designed to help domestic producers of steel who have been hit the hardest by illegal foreign steel dumping.

In announcing why the legislation is so important, Rockefeller said, "My state has two major steel facilities, one owned by Weirton and the other by Wheeling-Pittsburgh. Wheeling-Pitt is in bankruptcy and Weirton is struggling. Thousands of jobs and two important communities in a small, relatively impoverished state are threatened."

Noting that this situation is all too common, and one that demands immediate attention, Rockefeller said, "Throughout the steel belt, tens of thousands of jobs are at stake – more than 15,000 have already been lost."

"Most alarming though, is that our national security is threatened. Unless we act decisively, the United States could soon be as dependent on foreign steel as we are on foreign oil. We are facing a permanent loss of capacity that has the potential to harm every heavy industry in this country, including automakers, defense contractors and – in my home state of West Virginia – aerospace companies," he added.

The "Save the American Steel Industry Act" would greatly benefit the struggling domestic steel industry by:

1) Moving to protect retired steelworkers health benefits by creating a Steelworker Retiree Health Care Board in the Department of Labor to administer a newly-created Health Care Benefit Costs Assistance Program.

2) Providing grants to domestic steel companies to encourage consolidation so that they are in a better position to compete against foreign government-subsidized steel producers.

"For some time now, I have advocated consolidation as one of the best ways to ensure the survival of the domestic steel industry in the face of this massive surge of imports. Merged companies create greater economies of scale, and with their enhanced capacity and purchasing power, stand a better chance of competing against their heavily subsidized foreign competitors. While consolidation by itself will not relieve the hardships of the steel crisis for our steelworkers, their families and communities – the domestic industry can really only recover with the imposition of remedies under Section 201 – I believe that it is a step in the right direction," Rockefeller said, adding, "Together, these two provisions could make a tremendous difference for many domestic steel mills, especially in West Virginia."

***1-page fact sheet on the legislation follows***

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1-pager on Save the American Steel Industry Act

Title I – Industry-Wide Legacy Cost Sharing

Much of the domestic steel industry is heavily burdened by overwhelming retiree health care costs due to the massive layoffs that occurred during the 1970s and 1980s. These layoffs were necessary to make U.S. steel producers efficient and competitive in an advanced global market. On average, 10 percent of the cost of a ton of steel goes directly to retiree pension and health care funds for many of the largest producers of steel in America. Other nations have accepted responsibility for caring for their retired steelworkers. We cannot ask Americans to do the same, but we can ask steel producers to take responsibility for those who kept this industry alive in America.

In order to address this overwhelming cost, the bill establishes a 2% surcharge on the sale of all steel products in the U.S., both imported and domestic. The revenues will be placed in a Steelworker Retiree Health Care Fund, administered by a Steelworker Retiree Health Care Board at the Department of Labor. The fund will be accessible by all steel companies that provide health insurance to retirees at the time of enactment. These steel companies will apply to the Board on a yearly basis for funding to defray up to 75 percent of the cost of health care for their retirees. If there are insufficient funds in the trust to cover all costs, funds will be divided on a per-beneficiary basis, not on the basis of health plan cost. After two years, the Board will make projections on a yearly basis to determine necessary funds based on the size of the retiree pool. As the pool shrinks, the tax will be automatically reduced until it is phased out.

Title II – Incentives for Consolidation

Consolidation has occurred in every major industry in the U.S., and steel is no exception. But the overwhelming costs associated with steel companies merging, including legacy costs, environmental mitigation, and upkeep and modernization of deteriorating facilities makes consolidation particularly unappealing in this industry.

Title II will promote consolidation while encouraging the retention of workers and domestic steel production capacity. A $500 million grant program will be established at the Department of Commerce. After a company submits its merger proposal to the Department of Justice, and for up to one year after the merger is completed, they will be eligible to apply for grants of up to $200 million to help defray the cost of environmental mitigation and restructuring. They will receive awards if their application outlines a merger that will retain 80 percent of the domestic blue-collar workforce and production capacity for 10 years after the merger. Furthermore, if they qualify for awards, they will be given access to the Steelworker Retiree Health Care Fund for retirees they acquire during the merger who were already eligible for the program and any retirees created by the merger, as long as the merger occurs prior to 2010.