Manitowoc - “tariffs may not be the best solution”
During Manitowoc’s second quarter conference call last week, the new chief executive Aaron Ravenscroft
was asked about the ongoing Department of Commerce investigation into crane imports that the company had instigated.
He responded by saying: “After only two days in the job we have a few days left to deliver our final comments and after my initial reviews I believe that tariffs may not be the best solution and while we believe in fair trade, I do not want to burden our customers with additional costs particularly in this environment.”
This would seem to be a significant change in tack, following the sudden departure of chief executive Barry Pennypacker, who is thought to have instigated, and been the driving force behind the idea of the petition for an investigation into crane imports. The comments submitted to the investigation - many from Manitowoc customers - have though largely condemned the strategy. In fact 57 comments were against 17 in favour, of which 14 were Manitowoc dealers, and a further seven were largely neutral of seeking exceptions for themselves – mostly port crane companies.
We have now reached the comment rebuttal stage, which closes today. Rebutting any of the public comments received is very easy, simply click on the below link:
This will take you to the a page listing all of the comments received, each of which has a ‘Comment Now
’ button alongside it allowing you to add your views, input any corrections or to simply dispute it.
From some of the feedback we have received it is likely that some of the rebuttal comments may prove to be a good deal more controversial that the original ones?
You can also click on the following links for earlier reports on this subject :
Crane import investigation moves ahead
US to investigate crane imports
Crane import Tariff debate heats up
See Link-Belt comes out against tariffs
See Tadano joins the debate
Click here to see the full petition
Manitowoc has now confirmed its official position, following the recent change in management. The company had two possibilities to back away from its highly unpopular call for import tariffs or quotas to be imposed cranes entering the USA.
Two key options were:
1. File a request to withdraw the petition - this is a rare but perfectly possible move, we believe that the last time it was used was in 1966, when the Anti Friction Bearing Manufacturers Association requested the withdrawal of a similar petition that it had initially filed in 1964. The petition was granted at the last minute and that was the end of it.
2. Add a rebuttal comment asking that tariffs be dropped from consideration. The problem with this option is that the process remains live and out of its control, and given the current political environment who knows what might happen?
The following letter was sent out to customers and dealers by the new chief executive Aaron Ravenscroft and clearly sets out more pragmatic options to tariffs or quotas.
"Dear valued customer:
Last night, Manitowoc filed our final comments in the Department of Commerce’s investigation of mobile crane imports. As I previously communicated, Manitowoc filed a petition to request that Commerce investigate the impact of mobile crane imports on the domestic crane industry to ensure we are able to compete on a level playing field. Driven by foreign exchange rates and other factors, the industry has seen a significant increase in imports over the last decade while our export of cranes from the U.S. has declined 80%. We do not believe that the U.S. trade situation is fair, and as a result our domestic workforce has been reduced over 40 percent.
Moreover, we believe the most effective remedy would be for the President to take concrete steps to stimulate demand, particularly for U.S.-produced mobile cranes by;
(1) Enhancing Buy America/Hire America provisions for federally funded construction projects – these projects are funded by American taxpayers and should benefit the hard-working factory workers who pay those taxes.
(2) Increase infrastructure spending. It has been more than a decade since the U.S. funded a major overhaul of our existing infrastructure. This would boost demand across our entire industry, and infrastructure spending is one of the few issues on which both major political parties agree.
(3) Provide grants for local R&D in the crane industry. We believe that these remedies would help stimulate demand in the crane industry as well as advance the industry with new technology that is developed in the U.S.
Manitowoc is not requesting tariffs as a remedy. In the current environment, we believe that tariffs would inhibit crane demand and further deteriorate already difficult market conditions.
Manitowoc is the only remaining 100%, American-owned crane company, and we have been close partners to the U.S. military since 1961. Cranes are essential to our country, and we are simply requesting that the government level the playing field in an industry where we believe that the trade policies favor foreign manufacturers – our request is simply a step to defend our local workforce and to ensure the long-term viability of our company.
If you have any questions or comments, please feel free to contact me.
Just one small clarification or comment that we feel obliged to raise - Manitowoc is a publicly held corporation and it is therefore highly unlikely that all of its stock - and therefore ownership - is in the hands of US citizens. It is possible, but highly unlikely.