The Herald, Sharon, Pa.

May 15, 2009

‘Buy American’ could doom it, Duferco says

Wheatland Tube a company forced to buy elsewhere

By Michael Roknick

FARRELL — Buying American has always been a proud trademark of the local region. But Duferco Farrell Corp. said that could result in its demise.

Duferco already has lost one local customer because of the concept — Wheatland Tube Co.

Due to the “buy American’’ provision in the $787 million national stimulus package, Wheatland Tube acknowledged Friday the company can’t buy steel from the Farrell steelmaker which is just several hundred yards from its local offices. The provision is being interpreted that steel used for public projects must be melted in the U.S.

Duferco’s Farrell plant buys slabs, which it said are generally not available in the U.S., overseas and then rolls them into coils.

Bill Kerins, president of Wheatland Tube, said his pipe and tube company had little choice in dropping Duferco a few weeks ago.

“We’re prepared to do business with Duferco Farrell when they’re able to be in compliance with the buy American provision and we hope they’re able to work that out,’’ Kerins said. “The reason we have to follow the buy American provision is that more and more of our customers are requiring us to do that. This requirement just isn’t under the stimulus package, but under other federal and state guidelines that 100 percent of the steel used in projects must be made and melted in the United States.’’

Pennsylvania, Kerins said, has a requirement that steel used in certain government projects must be entirely melted in the U.S. He added Wheatland Tube has met all of its contractual purchase obligations with Duferco.

Wheatland Tube supports the buy American provision, Kerins said, because it provides opportunities for American workers.

“We also support Duferco Farrell and we have been a longtime customer of theirs and hope to continue to be a longtime customer of theirs. They provide a quality product,’’ he said.

Messages left at Duferco’s Farrell office were not returned Friday. However, in an interview with the Washington Post, Duferco Executive Vice President Bob Miller said the provision has been so harmful that the mill could close, resulting in 600 workers losing their jobs.

For much of the year Duferco has had rolling layoffs for most of its workers.

Imports has been a touchy subject with Wheatland Tube.

The company has long said it has been hurt by pipe imports, particularly those from China which resulted in the closing of its Sharon pipe plant several years ago. Last year Wheatland Tube and other U.S. pipe producers won a landmark trade case against Chinese pipe products which the U.S. International Trade Commission ruled were being dumped on American shores.

Dumping is when a producer sells a product below the price it cost to produce, which violates American and international trade laws.

Wheatland Tube and other American producers currently have another trade case before the ITC in which the companies allege Chinese producers have dumped larger pipes used in the oil industry on American shores. A ruling in that case is expected later this year.