CMC: Production will be relocated to Texas

The closing of Commercial Metals Company and the loss of 40 jobs, announced Tuesday, was due to a loss of rebar production, according to a statement from Susan Gerber with CMC’s home office in Irving, Texas.

Gerber responded to some questions from the Banner-News in an email late Wednesday morning.

Production will be relocated to the San Marcos, Texas fence post production facility, as operations in Magnolia wind down and cease in their entirety by the end of the company’s third fiscal quarter. In addition, CMC Steel Arkansas, a rerolling mill, will “significantly reduce production levels” over this same time period.

CMC Steel of Arkansas has operated a rerolling mill in Magnolia since 1987. The fence post operation has been in Magnolia since 1983. The company was formerly known as SMI Steel Arkansas.

A statement released from CMC Tuesday stated that “these decisions are primarily the result of what CMC believes to be unfairly traded and illegally dumped steel products entering the United States market. The decision to consolidate production in Texas reflects the impact of unfair trade on several plants and products.”

Cammie Hambrice, director of the Magnolia Economic Development Corporation, said Wednesday that work has been underway locally for some time to help offset some of these costs. She explained that “unfair trade” referenced in CMC’s statement involved Turkey flooding the United States market with cheap rebar.

She provided a correspondence dated Feb. 10 from Chase Emerson, field representative with U.S. Sen. John Boozman’s office in El Dorado, outlining the action that Boozman had taken concerning rebar imports from Turkey.

In this letter, Emerson stated that the Senate was to vote today on the conference report on HR 644, Trade Facilitation and Trade Enforcement Act of 2015. “The bill will strengthen trade enforcement and address the evasion of anti-dumping and countervailing duty orders. Sen. Boozman will vote ‘yes’ on this bill. The entire HR House delegation voted ‘yes’ on this bill a few weeks ago as well. This is an important bill to help push back against unfair trade practices that our steel producers are facing in Arkansas.”

“Additionally, Sen. Boozman sent a letter with 23 of his colleagues to the Department of Commerce expressing frustration about unfair rebar imports from Turkey. The letter pushes Commerce to do everything it can to prevent unfairly traded rebair imports from harming U.S. jobs.”

A letter dated Feb. 4 from the U.S. Senate to Secretary of Commeerce Penny Pritzker, read as follows:

“We write on behalf of steel reinforcing bar, rebar, producers in our states regarding the September 2013 antidumping and countervailing duty investigations on rebar imports from Turkey. The rebar producers in our states have expressed their concerns about the recent surge in rebar imports from Turkey. We urge the Department of Commerce to carefully consider the arguments raised by the U.S. industry in the remand proceedings of the antidumping investigation and to quickly complete the administrative review of the countervailing duty order on Turkish rebar. We must ensure that our antidumping and countervailing duties accurately reflect unfair trade practices so that U.S. workers and businesses can compete on a level playing field and are protected from unfairly-traded imports.”

“The U.S. rebar industry has expressed their concerns that current U.S. duties do not accurately reflect Turkish government subsidies or dumping margins for Turkish rebar imkports. U.S. imports of rebar from Turkey have increased from around 70,000 tons per month to over 130,000 tons per month since the Department’s preliminary countervailing duty determination in April 2014. It is our understanding that Turkey’s rebar imports now constitute approximately 80 percent of U.S. rebar imports and around 20 percent of U.S. domestic rebar consumption - and are projected to increase. Due to this unfair import competition, the U.S. rebar industry has experienced significant declines in production and is currently operating at around 63 percent capacity utilization. Many companies have been forced to close facilities, lay off workers, and cut worker hours.”

Hambrice said Wednesday that “as a community, we need to keep contacting these offices, write letters, make phone calls about that impact on our community.”

“I do feel like CMC tried to address those issues,” she said.

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