Bush’s proposed tariffs on steel will darken America


I went to school in the sunny resort town of Provo, Utah. All right, so maybe it isn’t a resort town, or that sunny. In fact, for those who know Provo, they know that the reason it isn’t sunny, for several months during the year, is a mixture of the inversion layer and Geneva Steel. The mountains trap the air over the city of Provo and with it trap Geneva’s nitrate, manganese and zinc compounds. And what gets trapped is a dark, brown cloud that suffocates those who live in Utah County. Worst of all, Geneva pollutes and rarely turns a profit.

It isn’t always that a well-working market aids environmental causes directly, but in the case of Geneva Steel and many other failing steel companies, that seems to be the case. Bush’s 30 percent tariffs are a measure to artificially prop up the steel industry against lagging US interest and cheap imports. Geneva Steel has filed for bankruptcy twice in the last six months, most recently on January 25, 2002. The first time they were bailed out by an emergency loan to the tune of $110 million. This time they are being bailed out by the tariffs.

This isn’t the first time Geneva has been in trouble. It has been in and out of bankruptcy almost continually since its inception as a private business after World War II. In one of its most recent reincarnations, Geneva was bought by the Cannon brothers: one a congressional representative and the other chair of the Utah Republican Party. In an Enron-esque move they bought the company, and then Rep. Chris Cannon sold out to his brother who sold out to creditors — both brothers made millions while the company slid into bankruptcy again and cost employees jobs and savings.

Without the tariffs it is almost guaranteed that Citicorp USA, Geneva’s big-gest lender, would liquidate the company by May 1st. Even with the tariffs, Geneva may not be able to save itself. The real question is how one of Utah’s major polluters has survived for over 50 years without turning a profit once in recent memory. Geneva is the third-highest polluter in a heavily polluted state (for the inter-mountain West). Although people argue that Geneva provides important jobs in the community, those jobs have been inconsistent for workers during the last decade. Workers rarely know if they will have a job from month to month — and more often than not, they do not have a job. The plant has been shut down since November of last year with no sign of reopening (although the company is encouraging its “employees” not to look for other work on the promise that it will open soon — an argument the company has been making for months). Such has been the story for several decades.

With the vacuum in the market created by the fall of Geneva, other businesses could pick up these trained workers. Utah is full of industrial businesses that use the kind of training that many Geneva employees have. And Utah is making a strong switch from industry to technology, a pursuit that has met with some snags in recent months but could create jobs for Utah. This would also aid Utah in making the long-term switch from failing industry to more promising technology. Such a shift could happen gradually, allowing the fewest number of workers to be adversely effected. As is, Geneva does more harm than good to its employees by keeping them on standby with empty promises, instead of allowing them vigorously to move into the job market. By turning to technology, in a concerted and planned effort, Utah could be an example to the entire failing steel industry that now is the best time to effect change, allowing the least amount of harm to a large group of steel workers. Other industries could continue to pick up trained workers as the steel industry is phased out over a generation in favor of cleaner and more lucrative businesses.

In the meantime, Geneva continues to pollute the state with no benefits provided. They have added almost no capital to the state and often leave their employees jobless. In fact, the only Geneva affiliates that have benefited from the company are the Cannons. For anyone who has been in Provo or Salt Lake, Geneva is a bane because it augments the inversion problem — a problem that creates a brown cloud over the Wasatch front for months and leads to a high pulmonary disease rate. If Bush’s tariffs succeed for Geneva, they will only succeed in polluting Utah further without creating any benefits to Utah’s economy.

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