Sun, Aug 09, 2009 - Page 11 News List

Tire retailers warn of possible job losses

REUTERS , WASHINGTON

US tire distributors urged US President Barack Obama on Friday not to force them into laying off workers by curbing tire imports from China, and US automakers asked to be shielded from any protection Obama might impose to try to save US Steelworker union jobs.

“We all have action plans prepared for [the possibility curbs go] into effect. And each one of them unfortunately involves a significant loss of jobs in our companies,” said Jim Mayfield, president of the Del-Nat Tire Corp, testifying on behalf of the American Coalition for Free Trade in Tires.

Mayfield, at a hearing conducted by the US Trade Representative’s office to weigh what many believe is a major test case for Obama on trade, said two members of his coalition feel strongly that their businesses would be at risk if the curbs are introduced.

The US Steelworkers union, which represents workers at major US tire manufacturers, filed a petition earlier this year for import relief and won a favorable ruling from the US International Trade Commission (ITC).

However, no US tire manufacturer joined the union in bringing the case even though imports from China have risen to about 46 million last year, from 15 million in 2004.

Leo Gerard, president of the Steelworkers union, said on Friday that was because the companies have operations in China and fear retaliation there if they speak up.

But opponents of the relief said US tire manufacturers like Bridgestone/Firestone, Goodyear, Michelin and Cooper made a decision years ago to get out of the low end of the tire market that China supplies and have no intention of returning to it, even if relief is provided.

“Their comment for us is there’s nothing for them to gain from this process,” Mayfield said.

Steelworkers argue protection is needed to save US jobs and to prevent Chinese firms from moving up the “value chain” into the high-performance tires that US companies now make.

But opponents said curbs would only boost costs for consumers, cause US wholesalers and retailer to scramble to find other suppliers and not create any new tire-manufacturing jobs in the US.

The ITC has recommended a 55 percent tariff on the Chinese tire imports which would be reduced to 45 percent in the second year and 35 percent in the third before being removed.

That would effectively cut off imports from China because they are already being sold at a very low profit, Mary Xu (徐文英), deputy secretary-general of the China Rubber Industry Association, told the Obama administration.

Meanwhile, the Big Three US auto companies asked that original equipment tires be excluded from any relief that Obama imposes, a position Gerard called “utterly disgusting” after the carmaker have themselves received massive government aid.

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