Sens to DoD: Use American steel

Steel-state senators say they want DoD to protect American steel and coal jobs when building new weapons and vehicles.

Steel-state senators are urging the Defense Department to rely exclusively on American steel for the building of military vehicles, but that might be a tall order.

West Virginia Sen. Jay Rockefeller and seven of his colleagues sent DepSecDef Ash Carter a letter last month urging him to change the department’s metal-buying policies so they favor American-made metals, Rockefeller announced Monday. Although weapons and vehicles may be assembled inside the U.S., much of the metal that goes into them is poured in other countries, which Rockefeller and his colleagues say hurts American steelworkers. The lawmakers want Carter to change DoD’s approach to give an edge to the domestic steel industry.

They wrote:

Congress has previously expressed concerns to the department regarding the definition of “produced.” The definition allows armor steel plate melted in foreign countries to comply with the Specialty Metals Amendment simply by the performance of low-value secondary finishing processes in the United States. This interpretation is contrary to decades of administrative practice requiring melting in the United States. Without question, melting is the most critical stage in the production of amor steel plate, accounting for over two-thirds of the product’s capital and labor costs. Consequently, the department’s approach will allow capital and resource intensive processes to be conducted overseas, costing jobs and technology, harming our economy and allowing these products to be brought back into our country and considered “domestic.”

What the senators don’t address is that foreign steel may be cheaper than metals produced stateside, and more basically, that there may not be enough plants inside the U.S. that can even do the work. As you’ve read here before, people got upset when DoD wanted to spike production of its ambush-protected trucks, only to find there wasn’t enough domestically produced steel to meet the demand quickly enough. In fact, by one measure, the U.S. steel industry today can only meet about two-thirds of the domestic demand every year.

So — we keep coming back to these questions about an “industrial strategy,” and this is a classic case study. Should the United States protect its domestic steel industry with this proposed policy for its military vehicles, even though it could make them cost more at a time of reduced DoD budget growth? Or should it save money — and possibly save entire programs such as JLTV or GCV — but sacrifice the jobs of  steelworkers and coal miners, and continue to rely on “globally sourced” steel?

What do you think?