Possible Good News or OT? More money to get compliant?

greenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread

For educational purposes only:

http://www.newsday.com/ap/rnmpwh1w.htm

Loans OK'd for Steel, Oil, Gas Cos.

By ANICK JESDANUN Associated Press Writer

WASHINGTON (AP) -- Steel, oil and natural gas companies hurt by fallen prices will be allowed to share $1.5 billion in government-backed loans to help tide themselves over.

The loan program was signed into law Tuesday by President Clinton on the same day U.S. steel producers announced a challenge to deals the Clinton administration reached with Brazil and Russia over steel shipments to the United States.

Sen. Robert Byrd, D-W.Va., chief proponent of the steel loan program, welcomed the help it would provide to steel communities and companies that have suffered from low-priced imports.

``These loan guarantees will provide important access to capital for U.S. steel companies,'' he said. ``It is time to stanch the damage and give the domestic steel industry a chance to recover.''

Steel companies will be able to tap into a $1 billion loan fund and borrow up to $250 million each at market interest rates. U.S. oil and gas producers and service companies could borrow up to $10 million each from a $500 million fund.

The measure will cost taxpayers an estimated $270 million to back the loans. Opponents say the measure will force U.S. taxpayers to support companies and banks that make bad business decisions.

Meanwhile, lawyers for U.S. steel producers said they will seek to void the agreements Brazil and Russia reached separately with the United States to avoid punitive tariffs.

Five companies mailed their lawsuits Monday night, while seven other producers plan to join the complaint against Russia later. The U.S. Court of International Trade in New York, which handles trade disputes, will hear the cases.

Industry attorney Mike Stein said the two agreements would not sufficiently protect American producers from illegal foreign pricing, although he admitted the challenge will be ``an uphill battle.''

Had the deals not been reached, Brazil would have faced tariffs of as much as 53 percent and Russia as much as 185 percent on the industry's main product, hot-rolled carbon steel. Brazil and Russia agreed to quotas and minimum prices to avert tariffs.

The U.S. industry already won tariffs on Japanese hot-rolled shipments and sought sanctions against Russia and Brazil as well to combat low-priced hot-rolled imports.

The lawsuits filed this week do not challenge a second deal with Russia restricting other types of steel. The federal government is named as the defendant, although Russia, Brazil and their steel producers will be allowed to join in the defense.

Commerce Department spokesman Morrie Goodman said the department had not received the lawsuit. Lawyers for Russian and Brazilian producers also said they had not seen the complaints but believed the agreements complied with U.S. trade laws.

A decision is likely to take at least a year.

-- Stan Faryna (info@giglobal.com), August 18, 1999

Answers

If I remember correctly, the worst depression since the 'thirties was prefaced with a bailout for Chrysler.

I see this commercial bailout as a clue that the climate in the credit markets is reversing.

-- Tom Beckner (xouttbeckner@erols.com), August 18, 1999.


Thanks Stan,

Just wish I had all my preps done. I'm afraid I'm not even close to ready.

Father

-- Thomas G. Hale (hale.tg@att.net), August 18, 1999.


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