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Letter to Leon Panetta, Secretary of Defense - Made in America

Letter

By:
Date:
Location: Washington, DC

U.S. Sen. Sherrod Brown (D-OH), the author of legislation to ensure that armor plate for America's military is truly "made in America," today led a group of seven senators on a letter to the U.S. Department of Defense (DoD) in support of a rule requiring that steel purchased by the U.S. military be 100 percent domestically produced.

"The Defense Department has done the right thing for our steel industry and for our national security by requiring that steel armor plate be 100 percent made in America," Brown said. "We know how to make steel armor plate here in America, and there's no reason why countries like China and Russia should be making our military's vehicles and equipment. Importing steel armor plate puts both our manufacturing jobs and our national security at risk, and that's why steel armor plate should be both melted and finished in the United States."

The 35-year-old rule, originally overturned by DoD in 2009, requires armor plate steel to be both melted and finished in the United States. Several Ohio companies, including Cleveland's ArcelorMittal and Cliffs Natural Resources and Marion's Nucor, are involved in the production of armor plate. In July 2012, DoD published in the Federal Register a proposed amendment to the Defense Federal Acquisition Regulations revising the definition of "produce" as it relates to the Specialty Metals Amendment. The proposed amendment is the result of more than two years of advocacy and effort by Brown and several colleagues.

Steel armor plate is used for military vehicles, tanks, and equipment. Under DoD regulations, specialty metals procured for defense purposes--including steel armor plate--must be produced in the United States. Despite more than 35 years of legal interpretation and administrative practice requiring that specialty metals be melted in the United States, DoD in 2009--in the midst of the wars in Iraq and Afghanistan and during a time when the demand for steel was high--published a final rule defining the word "produced," as it applies to armor plate under the Special Metals Amendment, to include simple finishing processes. This means that armor plate melted in foreign countries, including Russia and China, could be imported and subjected to simple finishing processes in the United States and then deemed to have been "produced" domestically.

After numerous Congressional inquiries and report language questioning DoD's interpretation of "produced," the FY11 National Defense Authorization Act included a provision requiring a review and, if necessary, revision of the existing regulation to ensure the definition is consistent with Congressional intent (the review was required to be completed within 270 of enactment of the law, i.e., early October 2011). On July 25, 2011, DoD published its request for comment, and the deadline for public comment was September 8, 2011. Earlier this year, Brown introduced the United States Steel and Security Act, which would have required steel armor plate to be both melted and finished in the United States, not only protecting American steel jobs, but our country's national security. Cleveland's ArcelorMittal manufactures steel armor plate, as does Nucor.

In September 2011, Brown--along with Sens. Richard Burr (R-NC), Robert P. Casey, Jr. (D-PA), Kay Hagan (D-NC), Daniel Coats (R-IN), Jay Rockefeller (D-WV), Al Franken (D-MN), and Amy Klobuchar (D-MN)--sent a letter to Defense Undersecretary Ashton Carter urging him to revise the Department's requirements on steel plate. During consideration of the National Defense Authorization Act in December 2011, Brown and Senate Armed Services Committee Chairman Carl Levin (D-MI) called for the DoD to expedite its review of this issue.

The full text of the letter is below and can also be seen here. In addition to Brown, the letter was signed by Sens. Robert P. Casey, Jr. (D-PA), Chuck Schumer (D-NY), Kirsten Gillibrand (D-NY), Al Franken (D-MN), Amy Klobuchar (D-MN), and Kay Hagan (D-NC).

The Honorable Leon Panetta

Secretary of Defense

Department of Defense

Office of the Secretary

The Pentagon

Washington, DC 20301

Dear Secretary Panetta:

We are writing in response to the Department of Defense's request for comment on its proposed revision to the definition of "produce" as it relates to steel armor plate. We applaud the proposed definition, which would reinstate the longstanding requirement that armor steel plate be melted in the United States. We, along with our colleagues in the House of Representatives, have worked hard to convey the importance of the Specialty Metals Amendment and the decades of precedent requiring that steel armor plate be melted domestically. The proposed definition will do much to ensure the strength of our domestic armor plate industry and, importantly, our defense industrial base.

As you are aware, over the past several years and on numerous occasions, Congress has expressed concerns to the Department regarding the definition of "produce" initially put forth in 2008 and finalized in July 2009. That definition would have allowed armor steel plate melted in foreign countries to comply with the Specialty Metals Amendment simply by the performance of low-value secondary finishing processes (e.g., quenching and tempering) in the United States. We expressed serious concerns with this definition which, by discounting the importance of the melt stage -- the most capital- and labor-intensive stage of the production process -- would have encouraged foreign production of this vitally important product, to the detriment of the defense industrial base and this nation's national security. As a result of our concerns, the Department conducted a review of the definition of "produce" and, on July 24, 2012, rightly proposed a revised definition reflecting the true intent of the Specialty Metals Amendment. Specifically, by removing "quenching or tempering of steel plate" from the definition of "produce," the proposed definition returns to the longstanding requirement that steel armor plate be melted domestically.

We are pleased to submit this letter for the record in support of the proposed revisions to the definition of "produce," and would also like to thank the Department for its thorough review.

The revised definition will help ensure that steel armor plate is produced right here in the United States, to the benefit of the domestic armor plate industry, its workers, and this nation's national security. We look forward to seeing the proposed definition finalized in an expeditious manner.


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