SCHUMER: U.S. MILITARY BUYING UP STEEL FROM AROUND THE GLOBE INSTEAD OF HERE AT HOME, HURTING STEEL PRODUCERS LIKE NUCOR STEEL IN AUBURN - SCHUMER URGES FEDS TO RESTORE REQUIREMENT THAT MILITARY STEEL BE 100% MADE IN THE USA TO BOOST CENTRAL NY JOBS
In 2009, Defense Department Ended 35 Year Rule Requiring Military Steel Plate To Be 100% Made in U.S. as Iraq and Afghanistan Wars Increased Demand - Decision Allowed Foreign Steel Melted and Produced in Countries Like China, That Don't Play By The Rules, To Compete with NY Steel Producers
In Personal Letter To Secretary of Defense, Schumer Urges DOD To Restore "100% Made in America" Requirement for Military Steel - With Iraq War Ending, U.S. Capable of Producing All DOD Steel Again, and Move Would Boost Cayuga County's Nucor Steel
Schumer: American Military Steel Should Be Made In The USA
Yesterday, at Nucor Corporation in Auburn, U.S. Senator Charles E. Schumer called on the Department of Defense to restore the requirement that all U.S. military steel be 100% made in the U.S., helping boost steel manufacturers like Nucor Corporation in Auburn. For 35 years, until 2009, the U.S. military got all of its steel from domestic producers, helping to create jobs at Nucor and other producers across the county. In the midst of the Iraq and Afghanistan wars when demand was soaring, the U.S. dropped the requirement which forced Nucor to compete with companies from around the world, including China, some of which do not play by global trading rules. This rule-change put a damper on New York steel manufacturers, but the Defense Department has been ordered to consider reinstating the old requirement. Now that the Iraq war has ended and ample U.S. manufacturers exist to meet the military's demand, Schumer urged the Department of Defense to reinstate the old rule to make sure military steel is made 100% in the U.S. Reinstating the rule would be a boon for Nucor, which currently employs roughly 300 people in its Auburn plant.
"Our military steel should be proudly stamped 'Made in the U.S.A.' and more of it should come from Nucor," said Schumer. "Great manufacturers like Nucor are ready to answer the call of duty - let's give them the chance to step up and produce high quality steel that our military needs, which would boost jobs across the country and help a company right here in New York that supports 300 jobs in Cayuga County's back yard. American workers can meet the military's need, so we should call on them instead of workers halfway around the world in China or other countries that don't play by the rules and undercut U.S. jobs at every turn."
Schumer toured the Auburn plant and then joined steel workers as he announced his push to restore the Made in the USA requirement for military steel. Nucor Corporation currently employs roughly 300 workers in Auburn, as well as 20,500 employees in other facilities across the country. In addition to its long production of steel in Auburn, Nucor's plate production lines that serve as a key part of the company's overall business help supply the Department of Defense and our men and women in uniform. Much of this steel work, including plated defense steel, finds its way to American military outlets across the globe, providing armored protection for the nation's military vehicles stationed at home and abroad.
Schumer noted that steel companies across the Empire State utilize Nucor steel, whether it's for military plate purposes or simply for raw material supply. Klein Steel, with several locations in Western New York, utilizes much of Auburn's materials and both Klein and Nucor agree that steel made in the U.S. would create more jobs here at home. As Nucor continues to supply, considers expanding, and diversifying its production line in Auburn and across America, it takes its other steel partners' goals into mind, often basing production off their demands. Many are working to hone in on the defense industry, which is why Schumer is seeking to ensure that foreign steel melted abroad does not undercut the ability of U.S. producers like Nucor.
Prior to 2009, the Department of Defense was required by law to purchase military steel that was 100% made in the U.S. However, due to the increase in demand for steel in light of the wars in Iraq and Afghanistan, the Defense Department dropped the requirement, inviting competition from China and other global competitors who do not abide by the same rules as U.S. manufacturers like Nucor and its subsidiaries and customers. Chinese companies are notorious for undercutting U.S. prices on a range of goods by manipulating and devaluing their currency. Schumer is continuing to press for a bill that would fight back against currency manipulation. The legislation has passed the Senate, and Schumer is continuing to press for House passage so the bill can be sent to the President.
Schumer said that American taxpayer money should support American jobs and manufacturers, particularly in national defense matters, and should not be sent overseas at the expense of Central New York companies. He noted that the country should also not be dependent on foreign producers for equipment and products that are essential to our national security. Relying on foreign countries to produce our military's armor steel plate opens up the possibility that an embargo or the end of production could seriously disrupt our military supply chain, putting troops and missions at risk.
The FY11 Defense Authorization Bill required the Defense Department to re-evaluate its definition of what constituted "domestically" produced specialty metals like armor steel plate. The Department of Defense held a public comment period at the end of 2011 to hear from the public, industry, and lawmakers. Now, the Defense Department is deliberating on that input and expects to report on their policy later this year. According to the Congressional Steel Caucus, "while the Defense Department has claimed that its regulatory change was developed in response to insufficient domestic steel making capacity for armor steel plate, to the best of our knowledge there has been no significant shortage of armor steel plate, even in periods of critical demand. Additionally, in the event of any supply concerns, there already exists a proven statutory waiver process. We would also like to point out that the past several years have seen new entrants in the market, further increasing domestic capabilities for the production of armor steel plate from melt stage through final processing."
Nucor Corporation's success and rapid expansion began in 1955, when it was named Nuclear Steel. It was during this era, the Korean War, when Nucor began its partnership with the Department of Defense, supplying much of the armor back then, too. In 1969, the model of the company changed and they expanded production to accommodate other steel companies, becoming the major raw material supplier that the company is today, with locations across the country. Nucor proudly holds the spot as the largest producer of steel in the U.S and touts roughly 20,500 employees in all.
In light of the country's ability to meet the military's demand for steel and its potential impact on Central New York and Upstate New York jobs, Schumer is pushing the Defense Department to once again require that military steel be made from start to finish in the United States. Reinstating the requirement could be a boon for steel producers across the state, especially Nucor Corporation.
A copy of Schumer's letter to the Secretary of Defense appears below:
The Honorable Leon Panetta
Secretary of Defense
Department of Defense
Office of the Secretary
The Pentagon
Washington, DC 20301
Dear Secretary Panetta,
I write concerning the Department of Defense's reconsideration of its definition of "produced" as it relates to the Department's procurement of armor steel plate and urge you to return to the Department's prior 35 year policy that required specialty metals like those used in armor steel plate to be entirely melted and produced in the United States.
Indeed, the FY11 National Defense Authorization Act required the Department to reevaluate the policy it adopted in 2009 which allowed steel melted by foreign producers to be considered "domestically produced" merely so long as the late stage finishing was performed in the United States. To label this foreign steel as a domestically-produced product is particularly troubling when you consider that the melting stage is undoubtedly the most critical step in the production of quality armor steel plate and accounts for over two-thirds of the product's capital and labor costs.
This policy not only runs counter to decades of procurement practices which required the melting be completed domestically, but could jeopardize national security as the military's steel plate supply chain would be sourced from foreign sources. Just as importantly, the Department should look to American workers and American Steel manufacturers to protect our troops, particularly when there is an ample domestic capacity to produce steel armor plate.
Steel armor plate is vitally important to our nation's war fighter and must be manufactured to the highest quality to ensure the safety of our troops and our nation's defense. As you deliberate on this policy, I strongly urge you to once again adopt the Department's former long standing policy to require our military source only 100% US-made armor steel plate in order to decrease our dependence on foreign suppliers and support our domestic manufacturing base.