Wilson Tool International Inc
Hearing Before The
House Committee On Small Businesses
"Lost Jobs; More Imports The Unintended Consequences of Steel Tariffs"
September 25, 2002
Good morning. Thank you for inviting me to testify today about the Steel 201 tariffs. My name is Brian Robinson and I am President of Manufacturing, Wilson Tool International. Wilson Tool International, Inc. of White Bear Lake, Minnesota is a 36-year old privately owned corporation that is the world's largest independent manufacturer of turret punch press and press brake tooling. Wilson currently has 470 employees. In October 2001 we employed 770 people. The total reduction of over 285 employees has taken place since that time due to the economic downturn and its devastating impact on the manufacturer sector.
I am here to tell you that the Administration's Steel Section 201 exclusion process did not work, it was unfair and it has dire consequences for further job losses in the manufacturing sector. Wilson Tool applied, as early as October 2001, for an exclusion on AISI 4150 cold rolled steel products engineered into special shapes (profiles). Wilson applied for this exclusion because we were unable to purchase these profiles from domestic sources. Not only did the Administration after six (6) letters from Wilson Tool, three (3) from two Congressmen, plus the submission of the Exclusion Questionnaire, not grant Wilson Tool's exclusion, the Administration never even posted our exclusion-that is the Administration never considered our exclusion request and did not provide the domestic industry any opportunity to comment on it. What is worse, the Administration never even told us that they were not going to act on our exclusion request. Indeed, when the Administration assigned an official "N" number to our exclusion request, by the way that was the only acknowledgement and contact we had from the Administration during this long, extensive effort, we reasonably assumed that our exclusion request was accepted and would be considered.
Accordingly, profile shapes in 4150 steel grade remain subject to the steel section 201 action and Wilson Tool is currently subject to 30% percent tariffs on these imported profiles from Austria. It does not make any sense to impose a tariff on a product that is not made in the United States-it does not help any domestic company it simply increases Wilson Tool's costs unnecessarily and makes it more difficult for us to compete in the market place.
Wilson Tool is currently the largest single independent purchaser of cold worked tool steel stock in the United States. Wilson Tool has always had a commitment to buy steel products from domestic sources whenever possible. While Wilson currently purchases 80-85% of its steel from domestic sources, Wilson has had to import these profiles because Wilson has been unable to purchase this material from domestic sources.
When Wilson Tool first developed a need for these profiles a couple of years ago, Wilson Tool actively solicited bids from all U.S. steel manufacturers capable of producing the U.S. grade 4150 profiles. Wilson required 29 separate profiles with varying sizes and quantity limitations ranging from 1 U.S. ton to a maximum of 21 U.S. tons per profile per year. Only one domestic company submitted a bid and it did not meet the requirements in quantities or scope.
Accordingly, Wilson had to resort to foreign producers and accepted the bid of Boehler-Uddeholm AG Ybbstal Profile of Austria. Wilson Tool has worked with Boehler over the course of the last two years, and spent tens of thousands of dollars to develop the profiles to our specifications. This development process was so lengthy in part because all of the products need to be certified and go through extensive quality control testing. Thus, even if domestic producers could produce some of the profiles we needed, it would not be feasible to purchase from them as we would have to go through the certification process multiple times.
Wilson Tool has always made a commitment to purchase steel from domestic sources, but when Wilson cannot purchase the steel we need from domestic source, we do not understand why we should have to pay Section 201 tariffs on that steel. It makes no sense. We are also very frustrated that our exclusion request was in effect denied without any opportunity for us to make our case. The exclusion process needs to be more transparent and accessible to small businesses such as Wilson Tool.
In closing, I have come to Washington to testify because there is something inherently flawed with the process imposed by the Administration for obtaining an exclusion to the Section 201 Steel Tariff when our exclusion request is totally ignored and we are not even told why, and even our elected Congressional representatives and their staff members are denied any acknowledgement to their inquiries, much less provided information regarding their constituent's issue; when small businesses must engage lobbyists to represent them or be compelled to travel to Washington in order to advocate their right to be heard; when a tariff is imposed on domestic manufacturers for importation of a raw steel product only to have their foreign competition import the same steel product produced at the same foreign mill as a finished product without a tariff, then we have a serious problem.
Thank you for providing me with an opportunity to testify today.