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October 28, 2009 02:00 AM

GPX blames OTR duties for Ch. 11 filing

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    MALDEN, Mass. (Oct. 28, 2009)—GPX International Tire Corp. is laying most of the blame for its Chapter 11 bankrutpcy protection filing on the “unreasonable” duties imposed in 2007 by the U.S. government on certain OTR tires imported from China.

    “The U.S. government's decision to impose extraordinarily punitive antidumping/countervailing duties on GPX's Starbright manufacturing facility in China has prompted the difficult decision to sell GPX's business to third parties,” said Craig Steinke, president and CEO of GPX, in a prepared statement.

    The U.S. Department of Commerce—in response to a petition from Titan Tire Inc. and the United Steelworkers union—determined in February 2008 that Chinese manufacturers and/or exporters of certain OTR tires would have to pay duties of up to 210 percent above the wholesale value of each tire.

    Titan and the USW originally petitioned the Commerce Department in 2007 for relief, contending that Chinese OTR tire imports were causing material injury to U.S. OTR tire makers. Bridgestone Americas Inc. later lent its support to the matter.

    GPX's Hebei Starbright Co. Ltd. subsidiary in Hebei, China, was hit withi 44-percent duties, causing GPX to move production of tires to other Chinese tire companies with lower duties, Steinke said it court filings.

    GPX later sued Titan, Bridgestone and the USW in the U.S. Court of International Trade, and ironically the CIT ruled Sept. 18 in favor of GPX and sent the matter back to the Department of Commerce for review.

    The CIT ruled Commerce's calculations of both antidumping and countervailing duties amounted to “double counting” and termed them “arbitrary and capricious and unsupported by substantial evidence.”

    GPX said Commerce's decision had a “devastating and irreversible financial impact” on Starbright and GPX, and accordingly GPX does not have the ability to wait for a final decision on the duties before completing the pending sales process.

    Commerce noted at that time that imports of the targeted tires from China were nearly 15 million units in 2006, up 21 percent from 2005. The value of those shipments was put at $339.6 million.

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