Robert L. Ehrlich, Jr. letter to Ken Mehlman, February 12, 2002

( ROBERT L. EHRLICH, JR, ENERGY ANO COMMERCE COMMITTEE ASSISTANT DEPUTY MAJORITY WHIP Congress of Hje ®niteb States flaunt ot Jlepresmtatibes WiBIjmsUn, »tt 20515-2002 February 12, 2002 Mr. Ken Melhman Deputy Assistant to the President and Director of Political Affairs The White House 1 600 Pennsylvania Avenue Washington, D.C. 20500 ТЬяпк- you for our continuing dialogue regarding domestic steel industry legacy costs -- the health care obligations of steelworker retirees. This is an issue of great importance to me, my constituents, and the domestic steel industry. As you know, overwhelming retiree health care costs are a result of tire massive layoffs that occurred during the 1970s and 1 980s. During this time, labor accepted a series of downsizing agreements in exchange for commitments on health care for retirees. In addition, technological advances, which have played a part in making the U.S. steel industry more efficient, have also served to diminish the workforce. Accordingly, more steel is produced today than during World War II, with only 10% of the labor pool. Today, integrated steel producers in the U.S. are at a competitive disadvantage against foreign manufacturers whose governments subsidize health care as well as other elements of their business plans. Equally important is the fact that legacy costs pose a major impediment to the consolidation and restructuring needed for our domestic steel industry to survive. In sum, under the current financial situation, our domestic steel industry and, in particular, Bethlehem Steel, cannot remain competitive in the global market while sustaining its health care commitments. Hopefully, the International Trade Commission’s (ITC) recent finding that foreign steel has been illegally imported into America and the expected imposition of high (40 percent) tariffs for a minimum of four years will provide a foundation for the ultimate resolution of this legacy cost issue. Thanks for listening. I look forward to working with you and President Bush on this issue. With best regards, I remain Very truly yours, у Robert L. Ehrli^n, Jr. Member of Congress (