June 19, 1985 EXTENSIONS OF REMARKS 16425 EXTENSIONS OF REMARKS CABLE MAKERS FACE GRIM The wire rope companies are now in for a ines industries it once targeted. "Orders FUTURE bout of domestic pressure, as well. In May, don't terminate-they are as current as if the Federal Trade Commission served sub­ they were issued last year," he said. poenas on each of them. Although the com­ Over all, a cloud of gloom has settled on HON. GEORGE W. GEKAS mission would not confirm its investigation, the wire rope makers. The future? "There's OF PENNSYLVANIA a copy of the subpoena shows that the com­ no other way to describe it," said Mr. IN THE HOUSE OF REPRESENTATIVES mission is requesting documents that refer Sayenga. "It's just bleak." to "prices, pricing plans, price competition, The current nadir in fortunes is a sharp Wednesday, June 19, 1985 and price cutting." That seems to indicate contrast to the industry's formerly bright • Mr. GEKAS. Mr. Speaker, the steel an investigation into price fixing. prospects. Wire rope technology spawned This new development, combined with in­ the Brooklyn Bridge, the Otis Elevator industry in the United States is going tense pressure from imports and from bal­ through a very rough time. But one Company and the oil boom in the South­ ance sheets overwhelmed by red ink, may west in the early 1900's. The product, a portion of that industry, wire rope­ force several of the surviving wire rope com­ highly engineered mass of wire, twisted into also known as cable-is having the panies to close as well. tight strands and then lubricated and bound worst of it. For the small producers, many of which together to form ropes of varying widths, A recent article in the Sunday, June are family-owned, the last two decades have supports enormous amounts of tension and 9, New York Times casts an especially produced a depressing casualty list. Key­ pressure. The industry calls wire rope the grim light on this industry which has stone Consolidated Industries, Leschen Wire "cheapest, strongest product that will go Rope and Pacific Wire Rope died. The around a comer to connect two points." more than a few plants in my congres­ American Chain and Cable Company and sional district. In its finished form, wire rope is used in Jones & Laughlin Wire Rope were pur­ equipment that activates elevators, mines I offer this article for printing in the chased by a British company, the Bridon for coal, drills for oil, operates ocean vessels CONGRESSIONAL RECORD so that Mem­ Corporation, which closed their plants. The and airplanes. It is used on submarines, on bers may read and become more ac­ Wickwire Rope Company folded, as did E. construction sites and even in the brakes of quainted with this serious issue. H.Edwards. Even earlier, one of the most famous wire the family car. It is, quite literally, every­ [From the New York Times June 9, 19851 rope companies disappeared : The John A. where. THE CABLE MAKERs' Los1NG BAlTLE Roehling Sons Company, the first United But the problem for the American indus­ States producer of wire rope. try is that these days it seems to be made IMPORTS AND A FEDERAL INQUIRY BESIEGE THE everywhere, too. Imports have risen phe­ WIRE ROPE INDUSTRY "Many of the small businesses have closed because they could not operate on the nomenally. They accounted in 1984 for <By Philip S. Gutis) narrow profit margins or because they almost 75,000 tons, 52.6 percent of domestic The soaring arches of the Brooklyn merged with another wire rope firm," said consumption, from just under 40,000 tons, Bridge represent Frederick A. Paulson's the industry's unofficial historian, Donald or 18 percent, in 1976. That situation is un­ brightest hopes for the future. But they Sayenga, the director of Bethlehem's Wire likely to change because the domestic com­ also serve as painful reminders of how far Rope Division, who resigned as of July 1. panies, much like the rest of the steel indus­ his industry has slipped since its robust The industry-wide blood bath continues. try, continue to wrestle with a strong dollar, past. The 106-year-old Broderick & Bascomb obsolete factories, high labor costs, and the Many of the bridge's cables are to be re­ Rope Company sold its assets in February high cost of wire rod, a raw material for placed soon, a job that will eat up 184,000 1984. One month later the United States rope that is itself under various import re­ feet-almost 35 miles-of the product that Steel Corporation closed the last of its three strictions. Mr. Paulson and his industrial colleagues wire rope plants. Profitability is a mere memory. In 1983, produce: wire rope, or, as it is more com­ The fate of the wire rope divisions of two net losses came to 16.1 percent of net sales, monly known, cable. other major steel producers, the Bethlehem according to an industry study. From 1975 Under a "Buy American" provision of New Steel Corporation and .Armco Inc., is uncer­ to 1981, net profits averaged 5.1 percent of York State law, only domestically made tain. "If we were not part of a larger organi­ sales. products can be used. "I want that job," and zation, I'm not sure we'd still be in busi­ Although many heavy users of wire rope, Mr. Paulson, the 73-year-old chairman of ness," said Ronald G. Dull, manager of engi­ including the construction and automotive the Paulson Wire Rope Company, as he neering services at Armco's wire rope divi­ industries, have rebounded from the reces­ glanced down at the bridge from his lunch­ sion, Union Wire Rope. "We've lost money sion, the domestic wire rope producers have eon table at the Windows on the World res­ since 1981." Both steel companies have put not. While domestic use was up almost 19 taurant on the 107th floor of the World former controllers in charge of their wire percent in 1984, United States producers Trade Center. rope groups-executives who are unfamiliar registered only a meager 5 percent jump in He has a good chance of getting it-if he with the product, but who know how to liq­ sales. The probable reason: Domestic wire can keep his 60-year-old family business uidate assets. rope sells for about $1,600 a ton, while afloat until the contract is given in the fall. The F.T.C. investigation, meanwhile, has Korean rope can be purchased and delivered Paulson Wire Rope, at one point a moder­ cast a pall over the industry. Executives for half that. Even the Department of De­ ately profitable company, has operated at a claim that they will be proved innocent of fense, a significant user of wire rope, buys loss every month since June 1982. And it is any wrongdoing, but they worry that the mostly imported rope. still one of the industry's luckier members. sheer burden of the investigation could send Domestic producers have spent more than Fifteen years ago, about 25 companies, their companies under. Providing the infor­ a decade and millions of dollars filing peti­ employing 20,000 people, would have quali­ mation mandated by the subpoena would re­ tions to have limits and tariffs placed on im­ fied as bidders on the Brooklyn Bridge job. quire "a small truckload of documents," Mr. ports. In 1973, the Treasury Department This year, only eight of those companies Paulson said. "I don't know how I can found Japanese manufacturers of wire rope remain in the wire rope business, and they comply with that subpoeona. It involves guilty of dumping-selling their product for employ a mere 4,500 people. endless work-and you don't make money less in the United States than in their own Those remaining companies are being be­ that way." country to increase market share. Japanese sieged from all sides. Although many states This is not the industry's first run-in with exports were to be slapped with an 11 per­ have Buy American policies, private-sector the F.T.C. In 1943, the comm18slon issued a cent to 13 percent duty, but American pro­ companies-the main customers for wire cease-and-desist order against 16 wire rope ducers say the order was not enforced until rope-do not. The domestic industry thus companies, charging them with participat­ 1981. had been decimated by a decade of imports, ing in an "agreement to fix and maintain In recently completed trade negotiations, mainly from South Korea. Although the uniform prices," said Daniel P. Ducore, the Japan again agreed to abide by the 1973 Government last month finally capped deputy assistant director for compliance in order. Brazil's exports were also limited to those imports, the industry says it will not the comm18sion's Bureau of Competition. 1,000 tons a year, while Spain signed off on help much. He concedes that the F.T.C. often re-exam- a limit of 1,662 tons. Those countries in 1984 e This "bullet" symbol identifies statements or insertions which are not spoken by the Member on the floor. 16426 EXTENSIONS OF REMARKS June 19, 1985 exported 2,633 tons and 1, 736 tons to the vice president of the Wire Rope Corporation as well as a carding machine and full­ United States, respectively. of America. "Our only hope is that we can ing wheel, a wheelwright shop, tan­ But the domestic industry remains par­ survive until the trade laws are renegotiat­ nery, and a factory that produced ticularly worried about its main nemesis, ed." South Korea.