(Editor's Note: This story is part of our #TireBiz30 in which we feature one archived story every day of September to celebrate Tire Business' 30th anniversary. Each story represents one of the most relevant news story published in our pages for that year. Find past years at tirebusiness.com/anniversary.)
WASHINGTON – After studying the volumes of exhibits and testimony in the South Korean radial passenger tire dumping case for two weeks, the U.S. International Trade Commission voted unanimously against pursuing a material injury case against South Korean tire makers.
Spokesmen for both sides have thus far declined to comment on the decision, preferring to wait and read the ITC commissioners' rationale statement when it becomes available.
Five U.S. tire companies – Goodyear, Firestone Tire & Rubber Co., B.F. Goodrich, Cooper Tire & Rubber Co. and Armstrong Rubber Co.– had petitioned the ITC to investigate imports of Korean-made passenger radials and impose antidumping duties against them. These companies presented evidence showing Korean tires being sold at retail prices in the U.S. below wholesale prices in Korea. Imports of Korean radials tripled from 1982 to 1983, to 3.39 million from 974,000.
FOR THEIR PART, representatives of the Korean manufacturers and importers argued that while the number of tires imported did rise greatly, they still represented only 3.3 percent of the replacement market, and that whatever pricing havoc existed in the aftermarket resulted from the U.S. manufacturers' policies, not the effect of Korean imports.
Apparently, the ITC commissioners sided with the Korean testimony in voting 5-0 on Aug. 27. Their explanation of the decision was not expected to be available before Labor Day.
Also siding with the Koreans was a majority of the 31 members of the Private Brand Tire Group, many of whom depend on Korean manufacturers (either Hankook Tire Mfg. Co. Ltd. or Samyang Tire Mfg. Co. Ltd.) to supply some of their tire lines. It was, in fact, primarily because of requests by U.S. private branders that the Korean tire makers said they began making P-metric size tires, which now account for a major share of imports from the Asian nation.
IN PREPARING for the Aug. 13 ITC hearing, attorneys for the Korean manufacturers and importers contacted the PBTG members through Albert Hoffman, president of the group and of Hoffman Tire & Rubber Co., marketer of the Jetzon, Laramie and Telstar brands.
Hoffman conducted a survey of the members, who voted 18-10 (with three abstentions) to support the Koreans.
Among private branders listed as selling Korean-made tires are Big 0 Tire Dealers, TBC Corp., Empco Industries, Hercules Tire & Rubber Co., K mart Corp. Dean Tire & Rubber Co., D.B. Orban Co., Reliable Tire Co. and Reynolds Tire & Rubber Co. Of these, Big 0, Empco, Hercules, Dean, Reliable and Reynolds are members of the private brand association.
Interestingly, the PBTG in the past has endorsed an antidumping stance, going so far as to pass a resolution at its January 1983 meeting regarding this position.
Hoffman noted that the PBTG members who supported the Koreans did so in opposing material injury action by the ITC. As for antidumping, Hoffman said, "We voted purely on the issue of whether or not the Korean tires were causing the U.S. tire manufacturers material injury because of aggressively low pricing."
Hoffman's statement was prompted by a written document drawn up by Hoffman's secretary in Hoffman's absence and at the insistence of the attorneys for the Koreans. This document stated the PBTG condemned the U.S. tire makers' "anti-dumping petition."
"I MUST GO on record as stating that in my opinion the majority of the group would have voted against dumping, if illegal," Hoffman said in a letter to the attorneys. "I think your statement should also have made reference to the fact that it was a split vote, not unanimous."
Attorneys for the U.S. tire makers duly noted the split vote in their post-hearing brief.
"Notwithstanding respondents' efforts to paint our case in an inaccurate, distorted, and self-serving light, to of the private branders voted in such a manner as to indicate that they agreed with the domestic producers' injury claim," they said. The brief also took aim at the Koreans' major claims at the Aug. 13 ITC hearing, such as the claim that they started shipping P-metric radials to the U.S. only because of a severe shortage of those tires.
"The suggestion is simply baseless," it said. "The Koreans were able to achieve rapid success with U.S. wholesalers and private labelers because of one factor- price. Availability was simply not an issue. Availability at lower than the then current market prices was."
Meanwhile, the Korean manufacturers reiterated their basic point from the ITC hearing- that the U.S.
manufacturers are in a mess of their own making.
"Petitioners are free to use conditions of excess demand any way they wish," they said in their post-hearing brief.
"They have chosen to forego sic profits for market share under conditions in which they could possibly increase both. But the consequences of such a decision cannot be a reasonable indication of material injury or threat of injury by Korea. It is plainly the result of voluntary action by the U.S. industry."
If the ITC had made a preliminary finding of material injury in this case, the Commerce Department's International Trade Administration would have begun investigating.