Gates Corp. has petitioned the International Trade Commission for repeal of the 55-percent antidumping duties on Japanese polychloroprene rubber-a move DuPont Performance Elastomers L.L.C., the last remaining U.S. neoprene rubber producer, opposes.
Meanwhile, the president of the United Steelworkers union local representing DuPont's Louisville, Ky., plant has written Sen. Mitch McConnell (R-Ky.) and Rep. Anne Northup (R-Ky.), asking for their help to keep polychloroprene rubber operations open in Louisville.
DuPont had announced it will cease neoprene production at Louisville by the end of 2006, laying off more than 200 workers, and consolidate those lines at its facility in Pontchartrain, La. Concerns that this may reduce U.S. polychloroprene production not only forms the basis of Gates' petition, but also gives USW Local 5-2002 an added argument-that the loss of the synthetic rubber output from Louisville will harm other U.S. businesses, including those with national security importance.
DuPont, however, insists those fears are groundless.
"Our assessment is that there is sufficient supply to meet North American market demand for polychloroprene currently, and we don't see this changing as we go into 2006," a company spokeswoman said in a written statement. Hurricanes Katrina and Rita affected the company's neoprene operations and supply, but those problems rapidly are disappearing, she said.
The ITC and the Commerce Department have levied antidumping duties against polychloroprene rubber from Japan since 1973, finding that their sale could cause material injury to the U.S. industry.
In a scheduled review last June, the commission ruled 3-2 that the duties should continue. In its Nov. 21 petition, however, Gates argued that the pending Louisville closure, plus the sudden September closing of Polimeri Europe S.p.A.'s polychloroprene plant in France, constituted changed circumstances which necessitate a second look at the issue.
Without Polimeri, Gates said, the only other source of neoprene for U.S. manufacturers besides DuPont is Lanxess, which is now allocating available supplies to existing customers and turning away all new ones. Gates itself cannot get all the polychloroprene it has ordered from Lanxess.
"Separate and apart from concerns about relying on a single U.S. producer and one alternative supplier, already supply-constrained, it is not at all clear that (DuPont) would be able to fill the gap left by Polimeri's exit," Gates said in its brief.
Removing the duties on Japanese polychloroprene is a necessity not only for Gates, but for every company that uses the rubber, according to John Bohenick, president of Gates' Power Transmission Division-North America.
"The main thing is that for a lot of small rubber manufacturers, if the polychloroprene supply is reduced, they're not going to be able to get polychloroprene at all," Bohenick said. "And if they can get it, it might be at a price that would make them uncompetitive."
In its reply brief, DuPont argued the ITC lacks statutory authority to conduct a "changed circumstances" reconsideration of an antidumping duties review. And even if it had the authority, the company added, Gates has no standing to petition for a reconsideration.
"A purchaser is not an 'interested party' as defined by the antidumping statute," DuPont said. Gates, however, claimed the supplier misinterpreted antidumping law.
Carl Goodman, president of USW Local 5-2002 representing DPE's Louisville workers, used the supply issue as a point in his Dec. 12 letter to McConnell and Northup, asking their help to keep the plant open.
"Even though many customers are in need of our neoprene products, (DuPont) management has said that by closing the Louisville facility they can increase the price of neoprene 'to what they want,' " Goodman wrote.
"This anti-customer attitude of (DuPont) will have a significant impact on other businesses across the country," he said. "Some of these businesses actually produce products for national security equipment."
According to Goodman, more than 200 workers face layoff at Louisville. Few of them meet DuPont's dual criteria for a full pension-at least 58 years of age with 25 years at the plant-though many of them have worked there at least 25 years. The company won't give the Louisville workers the same deal it gave workers in Maydown, Northern Ireland, employees when it closed its plant there several years ago, a full pension to all workers 55 and over, Goodman claims.
DuPont makes many varieties of neoprene at Louisville, and the company has said there won't be room at Pontchartrain to make some of them there, according to Goodman.
In his letter, Goodman also mentioned McConnell's family connection to the plant; Sen. McConnell's father was human resources supervisor there.
There is no set deadline for the ITC to consider the Gates petition, though it will have 120 days to decide the case if it grants the petition, according to Frank Schuchat, a Denver attorney representing Gates.
Goodman said he wasn't sure when he would hear from the offices of McConnell or Northup. The DPE spokeswoman said the company had no comment on Goodman's letter.
Neoprene was the first commercialized synthetic rubber, invented by DuPont and sold originally under the name Duprene.