Testimony Presented By Michael Bolt to Congressional Steel Caucus

April 30, 2008 

 ‘Federal Projects Should Put American Industries & Workers First’ 

Thank you Congressmen Peter Visclosky and Phil English for the opportunity to appear before you today. As leaders of the Congressional Steel Caucus, I especially want to thank you for calling this public hearing to listen to representatives of the pipe and tube industry who are urging government policies that put American workers first.

We need federal procurement policies that require domestic produced products like steel pipe and tube in federal infrastructure projects, rather than China pipe imports — that under U.S. trade laws are illegally subsidized and dumped in our market

My name is Mike Bolt and my friends call me Mickey.  I am a member of the United Steelworkers (USW) and an employee of Wheatland Tube Co., in Sharon, PA. When I was eighteen years old, I began working part time at the pipe mill while attending college.  After graduation, I continued at Wheatland Tube, accepting a position in their metallurgical and chemical lab, where I’ve been employed for 32 years. 

As I speak, more and more American industries and jobs are facing extinction from an onslaught of predatory practices of unfairly subsidized and dumped China imports surging into our market.  My employer has many examples of finished pipe products from China being sold in this country for a lower price than the actual cost that American producers pay for their raw materials.

      One reason for this is China is a non-market economy that subsidizes its manufacturing base.  China accomplishes this in several ways.  First, China artificially manipulates its currency in violation of world trade law.   And, second:  China provides numerous subsidies to its manufacturing industries.

 

With regard to steel production, a recent Alliance for American Manufacturing (AAM) study found that energy subsidies alone for Chinese steel producers have amounted to more than $27 billion since 2000. If you have not seen this study, I would be happy to provide it to the Congressional Steel Caucus.

In 2003, Wheatland Tube and other pipe and tube producers were increasingly losing the American market to a surge of subsidized and dumped Chinese pipe imports. Pipe imports from China had grown from almost nothing in the year 2001 when China ascended to the World Trade Organization (WTO) to a quarter of a million tons by 2003. 

I am no stranger to the fight against unfair China pipe imports, and became involved in an effort to mobilize other USW locals in Western Pennsylvania and Eastern Ohio. We formed a labor-management committee to raise our voices in a campaign to support trade cases that combated the threat of Chinese unfair imported pipe.  The first major action of our committee with USW-represented workers and the pipe company plant managers was to travel to Washington in early 2005 on a bus to raise our concerns with members of Congress and leaders of the Steel Caucus. The very first office we visited on Capitol Hill was Indiana Congressman Visclosky’s office.  We also visited other congressional offices that day including U.S. Rep. Phil English (R-PA) and U.S. Rep. Tim Ryan (D-OH).

However, with steel pipe and tube imports doubling every year after China ascended to the WTO in 2001 – the industry and the USW decided to jointly file a Section 421 case in 2005 under U.S. trade law against the surge of Chinese imports that were entering this country.   Many of us returned to Washington to participate in the pubic hearing of the International Trade Commission (ITC).

But despite a favorable commission ruling, President Bush rejected the ITC’s recommendation in December 2005 and decided to not place a tariff on the surging China pipe imports.   As workers and stakeholders in our pipe plants, we were devastated and knew what would come next. Many domestic steel pipe and tube manufacturers had already began idling plants and reducing the size of their work force.

The workers at the local pipe plants were placed on reduced work hours.  All of the pipe mills in the area were operating with a four-day or a 32-hour workweek.   Wheatland Tube was struggling shifting work around to attempt to maintain work at all of their facilities

     After President Bush decided to ignore the recommendations of the ITC, the future looked bleak for pipe workers.  Chinese steel pipe imports continued to double in 2006 to two million tons — and in 2007, it was projected to reach nearly four million tons.

The owners of the privately held Wheatland Tube and the sister plant, Sharon Tube, sold both companies to investment bankers.  Plant closings and consolidation appeared to then be the only method for trying to survive in a market where Chinese steel pipe imports had doubled market share in five years.

During this time, Congress had authorized the U.S. Department of Homeland Security (DHS) to construct a U.S. – Mexico border fence.  Some of us at the pipe mill thought this huge federal project might secure our jobs. After all, our pipe was well-known for fence applications, and therefore would be the natural first choice of a tax-payer infrastructure project. We kept hearing reports that sections of the border fence were being rapidly built, but we were informed that our company had not received any orders for the fence.

  In early 2007, China pipe imports forced Wheatland Tube to consolidate work to a few of their facilities. The company closed manufacturing facilities in Houston, Tex.; Little Rock, Ark.; and in my hometown of Sharon. The Sharon Tube and Little Rock pipe plants both employed about 600 USW family-supportive jobs, and both made high quality standard pipe that could be used in the border fence.    .

Shortly after the Sharon Tube plant was dismantled in May 2007, a lobbyist sent us a picture showing a section of the border fence clearly stenciled, “MADE IN CHINA.” Many of us had strong reactions and were bent out of shape by the China pipe picture in the U.S.-Mexico border fence. We could not believe that the DHS knowingly purchased imported China pipe, while 500 of our jobs were permanently destroyed. 

  Later during this past summer, Congressman English visited Wheatland Tube, wanting to know how many orders had been received for the construction of the border fence. Company officials informed him not a single order for pipe was placed for federal project. 

We gave the congressman the picture of the imported China pipe in the border fence, which he then asked the DHS to identify the location, which turned out to be in Arizona.

  According to Congressman English, the DHS claimed the agency had followed provisions of the Buy American Act, which only requires the domestic content of the border fence to be at least 50%.  The DHS had met those requirements, but if he was still not satisfied, the agency suggested they would send someone to that section of the fence and use black spray paint to cover up the “MADE IN CHINA” identifying stencils on the pipe.

      While the American steel pipe and tube industry was closing down manufacturing capacity, many of my friends and neighbors were losing their livelihood.  And at that same time, DHS was using American taxpayers’ money to purchase pipe from Chinese manufacturers, securing the future of pipe workers in China, not the U.S.

      This is wrong. In my view, the application of the Buy American Act was passed with the intent that American taxpayers’ money should be used to support American industries and American workers — and not to support subsidized industries in China.

 The pipe that was used in the construction of the border fence should have been produced by U. S. manufacturers and by USW members, instead of being outsourced to China.  This example highlights the problem of giant contractors only being concerned with securing the cheapest goods to maximize profits, irregardless of the quality of the product, or whether it was domestically produced.

Chairman Visclosky and members of the Steel Caucus, I want you to know my local union and the USW strongly supports your legislative proposal.  And my neighbors and friends at home support any plans to strengthen the Buy America procurement provisions.  America has a big need to replace and repair our infrastructure.  Let us not make the same mistake as we did with the border fence. 

The U.S. possesses a world class manufacturing base, as well as a highly skilled workforce.  Our government should be advocating for domestic industries and its workers as the source for federal infrastructure projects.  This legislation would ensure that it would happen and we applaud the effort.

We should not make national decisions that sacrifice our industry and workers merely to get the cheapest source, especially when that source produces shoddy pipe and violates the rules of fair trade. Our nation certainly needs a viable domestic industry to rebuild America’s infrastructure. Our workers and communities should be able to reap the benefit of good jobs from taxpayer supported federal projects.

Thank you for your time and the opportunity to address the Congressional Steel Caucus about this important issue on behalf of the workers employed by America’s pipe and tube industry. 

##