Nucor Corp, the second largest producer in the US slammed the proposal, saying that the government should not be dragged into rescuing the dying industry, the Associated Press reports.
Meanwhile, House Minority Leader Richard Gephardt came out in support of the proposal to have the taxpayer pick up the pension and benefits expenses, which are complicating the merger talks.
He noted that the government should help the industry with the consolidation necessary to remain competitive, “and if picking up legacy costs in order to make consolidation go forward is necessary, I’m open and amenable to those suggestions.”
While those supporting consolidation – a condition of government support for the industry – are plagued by significant pension obligations and retiree health insurance costs, Nucor is relatively free from these liabilities.
The larger steel makers have steadily reduced their workforces over the last half-century, and now roughly 90% of their healthcare beneficiaries are retirees, placing a significant drain on the companies’ coffers.
Nucor, on the other hand is a “mini mill” operation that makes finished products from scrap or semi-finished steel and uses nonunion workers. Its workforce is also significantly smaller and its retirees retire into a Medicare health plan.
The industry is seeking support from labor, in terms of job cut concessions, and from the government, in terms of protection against imports and payment of the industries’ $10 billion in pension costs.
The US International Trade Commission is scheduled to vote Friday on recommendations to the administration to assist companies in recovering losses caused by the imports.
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