The mere mention of global overcapacity in steel sends Robert Griggs into hyper drive.
Long-simmering and strong feelings rooted in supporting basic industries like steel have turned the founder and president of Trinity Products LLC, St. Charles, Missouri, into a trade activist.
No stranger to the steel sector, it took an egregious slapor twoin the face to the domestic industry in general and Trinity Products in particular to get Griggs goingbig time.
Griggs, who has spent just shy of four decades in the steel business, vaulted into action when confronted with a two-pronged affront to his sense of logic and Midwestern values.
The first event was the loss of a dredging deal in New Orleans bid out by the Port of New Orleans that would have allowed Trinity Products to supply 3,500 tons of pipe worth about $4 million and accounting for a months worth of work for my folks, he recalled. The job went to a Chinese supplier coming in through South Korea who won the bid with pricing that was 32 percent below mine.
No friggin way that wasnt because of government subsidies, he said. They are selling pipe on the dock in New Orleans at the cost of my domestically purchased coils.
The second fuse sparking Griggs outrage came when steel for piers supporting the Holland Tunnel in New York harbor bid out by the Port Authority of New York and New Jersey was awarded to a New York contractor who engaged a United States broker who used a Turkish pipe manufacturer working with Chinese coils.
Wow, all those companies with just a sliver of the business going to an American firm, Griggs exclaimed.
Two years ago, Trinity Products established a transloading yard in Fairless Hills, Pa. to keep laydown and transportation costs to about $50 a ton and serve just this type of project. When the bid was awarded, we were beaten by about 12 percent, Griggs estimated. That lost order would have accounted for about two months of work for my firm.
Those back-to-back slaps in the face (Trinity actually lost five bids but the last two stung the most) sent Griggs first to New York City where he spoke with the New York Daily News, which profiled his quest to bring free but fair trade to the nations shores.
Griggs turned an even deeper shade of red when he learned that the Turkish supplier for the Holland Tunnel project would be importing and holding the steel on barges in the harbor.
You wont get a single bridge toll paid or a dockhand or stevedore employed off this, all to save $750,000, he quipped, citing the total estimated cost savings achieved by using an offshore contractor and offshore product.
On a more personal level, the cumulative effect of the five bids lost to Chinese steel totaled more than $30-million in lost revenue for Trinity Products and roughly six months of work for Griggs mill.
After his visit to New York City, Griggs met with his elected representatives from Missouri and other states on Capitol Hill in Washington, D.C. During trade discussions, he frequently cites a recent report published by Duke Universitys Center of Globalization, Governance and Competitiveness and sponsored by the Alliance for American Manufacturing.
Impossibly low steel prices are a dead giveaway, Scott Paul, the Alliances president, told editors at the New York Daily News. When steel is priced below market value, it is clearly coming from a state-subsidized source like China. That distorts the free market and costs American jobs.
The report, titled Overcapacity in Steel: Chinas Role in a Global Problem, concludes with an open accusation and recommendation. Rising trade frictions have led to trade cases, which, even when successful, occur after the damage has already been done, the report pointed out. Chinas state capitalism model ... is at the core of the current overcapacity problem in the steel sector. To address overcapacity, China must reform to reduce the systemic nature of state-led development in the country and become more aligned with market economy principles as generally practiced.
Griggs summary? The bane of what is wrong with China is that no one ever closes anythingprofitable or not.
That message resounds loudly with the workforce at Trinity Products, which has seen layoffs and endured other belt-tightening measures in the past year. Particularly painful was the suspension of employee profit sharing until business conditionsand profitabilityimprove.
While business has been hurt by unfair trade practices, Griggs has continued to invest about $1 million annually in each of the past five years to maintain and improve competitiveness.
At a time of belt tightening at Trinity Products, Griggss workforce was similarly outraged over the lost business to Chinese coils after he explained the situation during his monthly finance meetings and in a letter sent to employee homes.
As Congress prepares to work on new legislation to enhance the national economy and the nations defense, we at Trinity are asking for your support ... while imports from China and other foreign countries are piling up on our shores and taking away our opportunity to compete, the letter read in part.
Employee calls soon began to flood into the offices of their federal representatives who got the message that we need action, Griggs said.
In the Midwestern tradition, Griggs, who grew up on a farm, majored in agricultural economics at the University of Missouri. While in high school and college, he stayed close to his roots and worked during the summers on a massive 20,000-acre farm owned by an individual he describes today as a maverick.
The time spent there proved pivotal. After that experience, I knew I wanted to own a business and after graduating from college in 1977 went on to sell steel so I could build relationships, he said.
Trinity Products was formed two years later as a steel brokerage capitalizing on the relationships Griggs had forged. The company acquired its first physical space in 1984 and started stocking popular steel products as a service center.
Pipe production began in 1988 with a focus on heavy civil construction. The company continued to expand its fabrication services and added coating capabilities. In 2007, Trinity Products opened its spiralweld pipe mill.
The company also stocks popular sizes of structural products, including piling, along with certain plate products that are complementary to Trinity Products pipe offerings ranging from 24- to 126-inches in diameter.
The newest product to enter the Trinity fold is the Tri-Loc Weldless Interlock System that combines the capabilities of the companys spiralweld mill with its fabrication services to produce a cost-effective method for pipe installation while improving job-site efficiencies.
Today, Trinity Products is the second largest structural, large-diameter pipe producer in the United States with the goal to be number one, Griggs is quick to point out.
Besides expanding Trinity Products equipment base and the scope of services it offers, Griggs has evolved the companys culture and management style to focus on employee accountability and decision making. Since 2001, Griggs has employed an open book management philosophy that essentially boils down to financial literacy training and awareness for his now 165 employees.
The real goal is to improve processes and not reduce people, Griggs commented on the approach. Our employees understand how we are running this business, and we are all controlling expenses.
We are below our expense outlays for this year by about $200,000 per month, he noted. Our employees know that a dollar saved is a dollar profit that we share.
In 2010 and a move geared to strengthen employee involvement and accountability, Griggs engaged the Cycle of Success Institute to help further employee engagement. Through this initiative, employees develop what Griggs describes as a how can I help mindset that brings ideas from the workforce to improve operations.
As their jobs improve, all work improves, he explained. It is all about the continuous pursuit of cost reduction and the development of talent.
We have had great success with the engagement of our workforce, he added. I have a particular fondness for maintenance folks, Griggs confessed. Because without them, nothing gets done.
Opposition to the the countrys current trade policies runs deep in the Midwestern heartland. Issues rooted in worldwide overcapacity, particularly in the context of China, have only reinforced Griggs belief in the Trump administrations ability to change policies and keep Americans working in American industries.
We need support to help the steel industry invest capital in itself, he insisted. I have put $5 million into my business in the past five years, and I told my federal representatives that it is hard to make money right now with policies in place that do not level the playing field. It is getting hard to justify more investment when I cant share the profits with my workers.
Trump won because he talks about jobs, Griggs emphasized. No one is taking care of the middle-class worker. Look at the Holland Tunnel project going with foreign pipe, he added. Its not just a profit- and-loss situation. Its about keeping jobs here.
America has allowed China to cheat us, he stated flatly. I believe in free but fair trade but not subsidized trade. I am closely following the Section 232 petition and hope some relief comes from that.
Reflecting on the lost orders of the past year, Griggs still shakes his head. The federal representatives from New York and New Jersey have to tell the Port Authority that it should be specifying domestic material only, he concluded. And I intend to raise hell if another major job gets lost to foreign steel. I will just keep on yelling.