The US steel industry is bullish on the progress and trajectory of the manufacturing sector, but its leaders would like some help keeping it going.
In a conference call, United States Steel Corporation's chairman & CEO Mr John Surma and American Iron & Steel Institute president & CEO Mr Thomas Gibson presented the AISI's 2012 public policy priorities, heavily emphasizing the ways economic growth is impeded by specific federal actions and inaction.
Mr Surma, who is the current chairman of AISI, the primary steel industry's trade association, began the presentation by noting a recent economic analysis from University of Wyoming Professor Dr Timothy Considine, whose specialty is energy economics.
That report concluded domestic steelmakers are playing a significant role in the manufacturing sector's post recession resurgence because of its high degree of interrelation with other economic sectors.
Mr Surma pointed to the energy, construction, and transportation sectors as examples of the impact domestic steel has had on the manufacturing rebound.
Dr Considine wrote and Mr Surma reiterated that "Every one job in the US steel industry supports seven jobs in the US economy, reflecting its ripple effect on employment."
The report found that in 2011, the domestic steel industry directly employed 150,700 people and thanks to its multiplier supported at least 1,022,009 jobs.
Mr Surma emphasized that domestic steelmakers contributed more than USD 101 billion to the US economy. Purchases of raw materials, energy, and supplies, are stimulating economic growth and employment on a wide scale.
However, the US Steel chairman stressed the need for the federal government to take steps that would establish more certainty in the economic outlook. He listed several factors inhibiting economic growth: burdensome corporate tax rates, uncertain energy costs, inadequate infrastructure investments, increasing regulatory burdens, and foreign unfair trade practices.
Mr Surma noted that these are not new issues, but he emphasized that the need to address them is, for domestic steelmakers, very, very immediate.
He said that steelmakers are prepared to capitalize on the US's abundant and available supply of energy resources, notably shale oil, but those opportunities are limited by federal regulatory policies. The delayed Keystone XL Pipeline project was cited as a singular example of this situation.
Mr Surma also said rebuilding the US transportation infrastructure should become a top national priority. And, he stated that any tax reform initiative must proceed from an objective of strengthening the US industrial base by reducing the overall tax burden on manufacturers. He said that "This is an essential issue that AISI is actively discussing with members of Congress. With manufacturing leading the nation out of the recession, the time is right for tax reform, considering that the US now has the highest corporate tax rate of any industrialized nation in the world."
Mr Gibson said the AISI's legislative priority would begin with its desire for a resolution to the federal surface transportation authorization bill. The so called highway bill has been delayed nine times by the US House of Representatives, reportedly because of disagreement between the House Republican leadership and its Caucus.
Congress has not agreed on a new transportation infrastructure funding bill since a six year program expired in 2009. The US Senate passed a new version last month to provide two years of funding, but House efforts to pass a longer term bill are stalled and so no compromise bill is possible. The impasse forced the House to pass its ninth temporary extension of the old law before its current two-week recess.
The extension of funding will last 90 days. Mr Gibson and Mr Surma both expressed understanding for the budget cutting priorities of some Republican House members who are widely considered the obstacles to a new six year bill.
However, Mr Gibson said the AISI would accept the short-term certainty of two years of funding provided by the Senate version of the bill, rather than a tenth extension of the 2009 program that provides no strategic outlook for steelmakers and other manufacturers.
Source - Industry Week
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