For years, The Timken Co., along with other U.S. manufacturers, has complained that illegal dumping by foreign manufacturers has hurt its ability to compete.
Such calls rang out often in the steel industry, where once-large players such as the former LTV Steel complained mightily, and predicted correctly, that they would be forced to close if the government didn’t crack down. But it wasn’t until recently that the government took action.
In late 2000, in one of the final acts of the outgoing 106th U.S. Congress, it passed the Agriculture Spending Bill. Included in that bill, as amendment Title X, Sen. Robert Byrd (D-WV) inserted the Continued Dumping and Subsidy Offset Act of 2000, known as the CDSOA or “Byrd Amendment.”
Essentially, the CDSOA modifies the Tariff Act of 1930 and instructs the U.S. Customs Service to put all antidumping tariffs it collects into special accounts, one for each case. Previously, that money went directly into the general treasury. Now, at the end of the fiscal year, the money collected is paid out directly to the companies successfully participating in each case.
A requisite of eligibility is that companies must continue to invest in their technology, equipment and people — areas in which Timken annually invests more than $50 million.
The CDSOA took effect for 2001 and paid out $230 million to 900 claimants. Timken was one of only two manufacturers in the bearing industry eligible for payments that year and received $31 million. Recently, Timken acquired the other eligible company, Connecticut-based Torrington Engineered Solutions, for $840 million.
In 2002, the ante rose. A whopping $329 million was distributed to more than 1,200 claimants, with Timken receiving $54 million.
There are critics on both sides of issue, but Timken officials laud the law as one of those all-too-rare cases where government intervention produces positive results for an entire industry.
Whatever your stance, it’s a simple lesson that any business owner should take note of: While it’s difficult, if not unrealistic, to rely on the government to regularly pass legislation that benefits your industry, sometimes fighting for your cause does pay off.
