NEW YORK The impending sale of ThyssenKrupp AGs plant in Calvert, Ala., came under scrutiny during a U.S. International Trade Commission (ITC) hearing on duties on corrosion-resistant steel from Germany and South Korea.
Foreign petitionersincluding executives from ThyssenKrupps North American and European operationsargued that revocation of the duties, which date back to 1993, is justified because the Essen, Germany-based steelmaker has operations in the United States and had chosen to supply steel domestically rather than import material (amm.com, Jan. 9).
ThyssenKrupp Steel USA LLCs mill "was built in Alabama because of the local supply strategy, where production proximity to our customers is essential. The target market is the U.S., Mexico and Canada," Christian Dohr, president and chief executive officer of ThyssenKrupp Steel USA, said during Wednesdays hearing.
Dohr said that he holds "veto authority" should import activity arise that would disrupt the U.S. market.
"The anti-dumping duties on Germany are serving no legitimate purpose, as I can see. Those duties are merely an expensive nuisance and unnecessary complication in our prep tons strategy," he said, adding that the company exports minimal tons every month from Germany to the United States as it seeks approval for its steel at 10 automotive original equipment manufacturers (OEMs) here. So far, the company has received half of those approvals, he said.
Domestic petitioners and ITC commissioners, however, questioned whether the companys supply strategy would continue once the Alabama assets are sold. Domestic interests fear that ThyssenKrupp will continue selling the German product to customers at discounted rates after it exits its U.S. operations.
"Its become obvious that this operation is being sold in its entirety. In their investor presentation, it says that this is a discontinued operation and it will be sold by the end of their fiscal year, which is Sept. 30," Alan Price, a partner at Wiley Rein LLP, counsel to Charlotte, N.C.-based Nucor Corp., said at the ITC hearing. "With regard to ThyssenKrupp, they obviously have massive distribution interest but no ownership interest going forward."
But foreign counsel said that the sale, as well as how the German parent will react after the transaction is finalized, is all speculation. "We dont think our case depends on Alabama," he said. "As you push out into the future and talk about divestmentwho, when, how, if? Thats all speculation. Within the context of a level of certainty, the mill thats built in Alabama, they have veto authority over shipments from Germany. That you can be certain of."
Stefan Grunhage, head of distribution services and senior manager of sales strategy and planning at ThyssenKrupps European operations, said the companys home market is the entire European Union, and less than 1 percent of ThyssenKrupps total corrosion-resistant steel shipments come to the United States.
While the Alabama plant has yet to be sold, a number of domestic and international companies are said to have bid for the operation, including ArcelorMittal SA (amm.com, Jan. 9).