Letters to the Editor
Hanger tariffs needed for fair trade
To the Editor:
This is regarding your recent front-page article entitled, “Hanger imports hit with another tariff.” As one of the petitioning companies in the most recent trade case, and the only petitioner in the dumping case against China, I would like to respond in an effort to provide you with the facts of these cases.
It is amazing that the author of the article and the editor would not contact one of the U.S. manufacturers before sending the article to press. I believe it is the same type of careless journalism that the national news companies demonstrated when they printed recent articles on hangers.
In one of the articles, it was stated that hangers may go up four to five cents, and some drycleaners would have to raise their drycleaning prices by $.35 to $.55 for each piece of clothing. That just does not equate, or my math is certainly different from their math.
In 2002, three of the domestic hanger manufacturers, Cleaners Hanger Company, United Wire Hanger, and M&B, filed a trade case called a Section 421 trade case. This is China specific. When China was accepted in the World Trade Organization (WTO), they agreed to ground rules for international commerce. And if they failed to abide by those ground rules, this specific provision allowed domestic industries harmed by their exports to file a trade case.
This type of trade case was much more economical and faster than the normal Anti-Dumping Case, and since the domestic hanger industry needed relief fast, we chose this avenue. The International Trade Commission (ITC) ruled in favor of the domestic industry, not once but twice. However, a Section 421 case has to go to the president for him to make the final decision. At that time, President Bush did not grant relief.
Shortly after that case, Cleaners Hanger Company, once the largest hanger producer in the world, filed Chapter 7 Bankruptcy, thus putting all of their employees out of work. Additionally, United Wire Hanger and Laidlaw, two other national producers, both shuttered their U.S. operations and began importing 100 percent of their hangers, thus putting all of their employees out of work as well. M&B had to close its South Hill, VA, location, putting an additional 100 people out of work. Not only were employees of these established companies affected, but also many vendor companies were forced to terminate their people.
The steel industry that is so important to our country’s health lost the production of many tons of wire rod that it used to supply to the U.S. hanger industry. Also, the U.S. companies that produce boxes, cape paper, tube paper and paint, all lost volume because of the unfair trade in hangers.
Essentially China gave us a choice: one, fire the good people that have helped us compete fairly and successfully over the years, tell our vendors that supported us that we can no longer compete, and tell our customers that depend on us that we have failed them and like other companies before us, we are going to become a broker for Chinese-made hangers. Or two, our other choice was to continue to fight for the rule of law and fair play.
We chose to stand and fight. We are proud of the fact that we kept our plant open in Leeds, AL, and that we are continuing to purchase raw materials for that plant, as well as our plant in Piedras Negras, Mexico, from U.S. suppliers.
When we filed the Anti-Dumping Case against Chinese-produced wire hangers and received favorable results, we saw the same Chinese factories that we fought against “thumb their nose” at our trade laws and begin shipping their products through third countries so they could avoid the Anti-Dumping Duties.
This practice was very widespread and enabled another country, Vietnam, to begin shipping wire hangers. We filed an Anti-Circumvention Petition against two companies in Vietnam for making a minor adjustment to Chinese-made hangers and claiming that the hangers were of Vietnamese origin.
We won those cases. Also, an importer in Mexico was caught by U.S. Customs and Border Protection and was fined several million dollars and sentenced to serve time in jail for illegally bringing Chinese hangers into the U.S.
In December, the domestic hanger industry filed Anti-Dumping cases against Vietnam and Taiwan and a Countervailing Duty Case against Vietnam.
The current tariff, which was reported in the article in question, is the preliminary Countervailing Duty against Vietnam. (The key difference in a Countervailing Duty Case and an Anti-Dumping Case is that a CVD case alleges government subsidies and an Anti-Dumping case alleges sales at below a fair price.)
Many industries fight hard battles to stay in business against unfair trade. U.S. producers of nails, threaded rod, and innersprings, just to mention a few, have filed Anti-Dumping Cases against China and won.
Some companies give in, and some stay and fight for what they believe. I am proud of the great people at M&B, the great customers that depend on us, and our vendors that make quality products so that we can continue to supply a great American industry.
I know many of our drycleaning and textile rental customers are concerned that the price of hangers will rise. Actually, that really depends on where the hangers are produced and what the cost of steel does.
If they are buying unfairly traded hangers from Vietnam, Taiwan, or China, their prices will go up as U.S. Customs collects higher duties in compliance with U.S. law.
If they are buying their hangers domestically, it really depends on what the cost of steel does.
At M&B, we believe in the three P’s: People, Planet, and Profit. We try to operate our business by the golden rule; we try to treat our people, our associates, our customers, and our vendors like we would want to be treated.
We know that the planet we live and work in is fragile, and we try to treat it so. Our paint is environmentally safe, our boxes and paper are either recycled or purchased from vendors that support sustainability through the Sustainable Forest Initiative, and the steel we use is 100 percent recycled (unlike most of the Chinese wire rod industry that produces approximately 85 percent of its wire rod from iron ore, not recycled material).
Also, we understand for us to grow our business and continue to supply jobs, we must make a reasonable profit. Profit is not a dirty word; it is something that has made America strong.
Many of you that read the article, as well as this letter, are loyal customers to M&B. We sincerely thank you for that. We have received comments from some of you that disagree with the tone of the article in question. We do, also. Our country has lost manufacturing jobs to the Far East in disastrous numbers. It is time for us to stand up and say enough.
M&B has been in business for almost 70 years. That doesn’t happen by chance. The fourth generation of the founder is currently working at M&B. That is something we are proud of.
All of the excellent people that work at M&B would like to thank you, our customer base, for helping us achieve these milestones and remain a viable U.S. manufacturer over the years.
Please visit our website at www.mbhangers.com to find out more about us. Also, we invite you to check out www.pinkhangers.com to find out what you can do to join us and our drycleaning and distributor partners to support cancer research. Thank you.
Milton M. Magnus, III
On behalf of the associates
of M&B Hangers