Titan International Inc. and the United Steelworkers union together have asked the U.S. government to impose duties on imported Chinese off-the-road tires.
The company and union filed an antidumping and countervailing duty petition with the U.S. International Trade Commission and the U.S. Department of Commerce on June 18. The petition claims OTR tires-used on vehicles or equipment in agricultural, construction and industrial applications-from China are being subsidized and dumped in the U.S., and asks the government to set duties to offset the imports.
China is the single largest source of OTR tire imports, according to data from the USW, accounting for more than 83 percent of total imports by volume in 2006. Imports of certain OTR tires have increased to nearly 15 million tires worth $374.3 million in 2006, from 11.2 million tires worth $166.4 million in 2004, the petition said, citing trade and customs figures.
``We are seeing the predatory policies of China chopping away at our domestic tire manufacturing industry,'' said USW President Leo Gerard. ``It's urgent that we fight for aggressive enforcement of our nation's trade laws before it's too late and we see more family-supportive jobs lost to China subsidization and unfair dumping.''
Comparisons in the petition between Chinese- and U.S.-made tires show the imports are underselling domestic tires by an average of 29 percent and the underselling margins are ranging between 2 and 30 percent. Titan claims it has lost ``significant sales and revenue'' to low-priced imports, although Maurice Taylor Jr., Titan chairman and CEO, didn't detail the financial impact.
Titan reported corporate sales of $679.5 million in 2006. The company has a goal of producing more than $200 million in OTR tires in 2007.
The Quincy-based firm posted sales of $226.3 million in the first quarter of 2007, with most its $43.7 million sales increase from the like period of 2006 attributed to expanded OTR tire production.
The company purchased Continental Tire North America Inc.'s OTR tire facility in Bryan, Ohio, in July 2006, for $53 million.
Taylor said the company doesn't mind competition, but Chinese government subsidies on trade are ``wrong and illegal.''
``The freight alone to ship tires from China to the U.S. is greater than the direct labor used to produce the tires,'' Taylor said. ``This means labor is essentially free in China. There has been enough time for China to straighten things out, and since it's not working, we are asking our government for fairness.''
Call for fair trade
Taylor said when manufacturing leaves the U.S. via subsidies from foreign governments, not only are the jobs lost, but so are tax bases to pay for teachers, police, firemen and other public workers. China doesn't import tires without duties and ``multiple obstacles,'' he said. ``We want fair trade.''
The Steelworkers' joining with Titan in the petition helps speed up the process because the union represents about 70 percent of the domestic tire work force, a USW spokesman said. In addition to about 1,355 workers at Titan's three plants, the union also represents about 4,215 workers at Bridgestone/Firestone, Denman Tire Corp. and Goodyear plants in the U.S.
If the Steelworkers weren't involved, Titan would have to poll its competitors and gauge their interest in going forward with the action because the outcome would affect them as well, the spokesman said.
This is the first time Titan has taken this type of measure to combat what he believes is unfair trade, Taylor said, but he insists he should have done it ``years ago.''
Increases in imports have affected domestic production and jobs throughout the industry. Tire makers have reduced capacity in several areas, particularly lower-margin or mass market segments.
Titan makes OTR tires at U.S. facilities located in Bryan; Des Moines, Iowa; and Freeport, Ill.
Steve Vanderheyden, president of USW Local 745, which represents the hourly work force-650 who are active, 300 on layoff-in Freeport, said union members have seen how difficult it is to compete with tire imports subsidized by China.
Dialogue with the company regarding bringing back laid-off workers has generally been tied to pressures from China, Vanderheyden said. ``The impact on our job security and communities requires a more level playing field,'' he said.
The Des Moines site has faced the same staffing concerns as the workers in Freeport, and though employment at Bryan has been more consistent, it may be just a matter of time before larger-size OTR tires-36-inch diameters and above-currently made there are targeted for import, he said.
Taylor said all tire sizes are vulnerable because they're all being subsidized in China.
The Commerce Department will determine whether it will initiate an investigation within 20 days, a USW release said, and could issue preliminary determinations in the case by early November 2007. The ITC has scheduled a conference for July 9 in Washington regarding the petition and will make a preliminary injury determination by August.
If the case makes it past those preliminary steps, public hearings would likely begin next spring, the USW spokesman said.