Letter: Steel helping autos meet standards
The steel industry continues to work side by side with automakers in developing new steels and manufacturing methods, like advanced high-strength steel (AHSS) whose unique metallurgical properties and manufacturability enables the automotive industry to affordably meet increasingly stringent government requirements.
This is part of the reason that we take strong exception to the claim in your recent editorial (“Tariffs will hurt autos, workers,” Feb. 21) that “steel accounts for about 25 percent of the production cost of autos.” The American Iron and Steel Institute (AISI) calculations indicate this number to be under 5 percent.
As illustration, think of it this way — if 25 percent of a $36,000 vehicle was from the cost of steel, and with the current cost of steel running around $900 a ton, this would then imply that the weight of the steel alone in the typical light vehicle would be more than nine tons! The average light vehicle weighs about two tons in total.
Foreign steel imports were up 15 percent in 2017 compared to 2016, capturing 27 percent of the U.S. market. Approximately one quarter of our domestic steel capacity today is not being utilized. That translates to idled plants and thousands of unemployed workers.
If unfair trade practices are not addressed, the steel industry, including the more than 22,000 steel jobs in Michigan and Ohio, could be further injured — and steel consumers could be totally reliant on foreign sources for steel. This will leave steel consuming industries at risk because they will no longer have local suppliers who can provide “just in time” delivery of product.
Allowing the continued importation of injurious subsidized steel products greatly discourages research and development of advanced steel products, which is critical not only to auto production but military and transportation applications as well.
Putting in place effective remedies will ensure U.S. steel producers remain at the forefront in developing the most capable and advanced steel products for the auto industry and many other industries.
Thomas J. Gibson
president and CEO
American Iron and Steel Institute