U.S. tire manufacturers upset over Chinese imports

Tag : chinese tires

WASHINGTON Lawmakers representing thousands of workers at tire manufacturingplants in Illinois and Iowa said Tuesday that Chinese-made importshave been sharply undersold here, threatening domesticmanufacturers of off-the-road tires.
"I don't know how much more we can take," Rep. Don Manzullo,R-Ill., said of Midwest communities such as Freeport, Ill., withits Titan Tire Corp. plant. "We continue to lose one industry afteranother after another."
Lawmakers, organized labor and corporate executives told the U.S.International Trade Commission that the Chinese government'sactions result in Chinese tires underselling U.S. products by asmuch as 50 percent.
They want the commission to recommend that President Bush providerelief, possibly by imposing duties or import quotas on theChinese.
"American producers are facing a double hit as Chinese companiesare dramatically increasing exports to the U.S. while benefitingfrom both government subsidies and dumped products significantlybelow production costs," said Rep. Leonard Boswell, D-Iowa.
Dumping is defined as a foreign producer selling a product in theUnited States at a price below that producer's sales price in theirown home market, or at a price that is lower than the cost ofproduction.
Executives for the American tire companies say the Chinese dumpingcomes at a particularly bad time because the U.S. agriculturesector has boomed in recent years and the demand for specialtytires has gone up significantly.
Among the facilities affected are the Titan plant in Freeport, aswell as Bridgestone Firestone North American Tire plants inBloomington, Ill., and Des Moines, Iowa. In Illinois alone, thecompanies have about 3,700 employees.
Those opposing a tough stance with China were scheduled to testifyWednesday before the commission - a nonpartisan, independentfederal agency - which was not expected to reach any conclusionsfor Bush to consider before August.
The Commerce Department in February imposed duties on Chinese-made,off-the-road tires - the kind commonly used in agriculture andmining - after its own preliminary finding that China subsidizedthe illegal dumping of tires.
The monthly average of Chinese tire imports has declined in themonths since, along with an increase in U.S. production andemployment in the specialty tire industry, according to testimonybefore the commission.
"We're seeing things start to turn around. Customers we had notheard from in a while are calling and placing orders," said MauriceM. Taylor Jr., chairman and CEO of Titan International Inc., theparent of Titan Tire. "In the first quarter of 2008, ourcorporate-wide net margins were about 3 percent, compared to thenet loss we suffered in 2007."
But Kenneth Allen, vice president of Firestone Agricultural Tire, adivision of Bridgestone Firestone, said if the relief period isshort-lived the company will have to consider outsourcing becauseit can not make tires for a price that would compete with thosepreviously offered by the Chinese.
"The Chinese producers penetrated our market by targeting thehighest volume tires that were our bread and butter," he said."They did not penetrate the market by offering new and better tiredesigns. Instead, they offered comparable tires that undersold ourtires by 30 (percent) to 50 percent."
Critics of the Chinese say imports of tires from China increased to3.2 million from 1.8 million tires between 2004 and 2007, with thevalue jumping to $324 million from $114 million.
Sen. Dick Durbin, the leader of Illinois' congressional delegationand the Senate's second-ranking Democrat, said he supported effortsto "restore balance" to the tire trade.
"I believe that American companies and their workers can competewith anyone if granted a level playing field," he said.