House Panel Holds Hearing on the Challenges to Manufacturing

By March 21, 2013Economy, Energy

Today that House Energy & Commerce Subcommittee on Commerce, Manufacturing and Trade held a hearing titled “Our Nation of Builders: The Strength of Steel” looking at the challenges facing many of our nation’s steel companies and energy-intensive manufacturers.

This hearing is part of a series of hearings by Subcommittee Chairman Lee Terry (R-NE) to talk about the state of manufacturing in America. The CEOs of several major steel companies testified today including Mike Rippey of Arcelor Mittal USA, John Surma of United States Steel Corporation, John Ferriola of Nucor Corporation, Joe Carrabba of Cliffs Natural Resources and Richard Harshman of Allegheny Technologies.

A common theme heard during today’s hearing was the need for affordable sources of energy and how burdensome and costly regulations threaten the competitiveness of manufacturers.  The shale revolution has provided low natural gas prices to manufacturers which is helping them better compete and grow, however regulations from the EPA and other agencies put this advantage at risk. United States Steel Corporation Chairman and CEO John Surma discussed this in his testimony:

“Too often, some of our biggest challenges come from counterproductive and costly government policy and regulation. The Energy and Commerce Committee knows these problems well and we appreciate your efforts to conduct vigorous oversight of US EPA regulations and guidance, and to attempt to force better cost-benefit analysis of individual rule makings, as well as the cumulative cost of regulatory compliance and the opportunity costs associated with lengthy and uncertain environmental permitting processes.”

Joe Carrabba, president and CEO of Cliffs Natural Resources mentioned the need for adequate transportation in order to ship products to market, He urged the members of the Subcommittee to invest in roads, bridges, ports and rails. Earlier this week the American Society of Civil Engineers released their 2013 Report Card for America’s Infrastructure,and the nation received a D+. This is not an acceptable grade if manufacturers are going to compete. Our competitors are investing in their infrastructure and we are falling behind. From Carrabba’s testimony:

“In heavy industry, adequate transportation infrastructure is a key element of cost effectively manufacturing a product and delivering it to market. Just as iron ore mines and steel mills rely on efficient rail, road and port infrastructure in our supply chains, so too is the prosperity of the U.S. economy linked to the adequacy of our national infrastructure. I urge you all to view federal support for roads, bridges, ports and rails, not as expenditures, but as investments in the competitiveness of our nation. These investments benefit communities, support workers, and drive demand for iron ore, steel and many other manufactured products. Developing nations such as China are recognizing the importance of infrastructure with massive investments in their transportation networks.”

Another concern talked about in today’s hearing was the need for strong trade enforcement and the need for our trading partners to play by the rules. Nucor President and CEO John Ferriola talked about the need for a level playing field:

“Global trade is governed by a set of rules. If our system of trade is going to work and be fair to all participants, we must use every tool at our disposal to enforce these rules.”

Right now it is 20 percent more expensive to manufacture in the United States compared to our nine largest trading partners. If manufacturers are going to thrive and compete, Washington must act on pro-growth policies. Piling on with more burdensome regulations that drive up energy prices will only set us back further. Manufacturers thank the Subcommittee for their continued work to explore our many challenges to competitiveness.


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