Stoughton Trailers says favorable ruling in trade case could lea - WKOW 27: Madison, WI Breaking News, Weather and Sports

Stoughton Trailers says favorable ruling in trade case could lead to 400 new jobs in Evansville

Posted: Updated: Jun 10, 2014 11:13 PM
EVANSVIlLLE (WKOW) – A local company is alleging unfair trade practices by Chinese manufacturers are hampering its expansion.

Stoughton Trailers, LLC produces 53-foot dry containers to supplement its production of roughly 14-thousand grain trailers, chassis and dry vans. The containers are produced at the company's facility in Evansville, which currently houses about 170 workers.

Bob Wahlin, President of Stoughton Trailers, said the company was building up to 8-thousand of the 53-foot containers a year from the late 1990's until roughly 2006. He said an influx of Chinese imports into the market forced out their American competitors.

Stoughton Trailers was among the companies that stopped making the containers. But Wahlin said the company ultimately decided to give it another go. The company re-modeled its Evansville plant, where the containers are manufactured, from 2009 to 2010.

Stoughton Trailers is currently the only American company manufacturing the 53-foot containers.

But Wahlin said the company is once again running into issues with Chinese manufacturers. He alleges that two, Chinese companies are using subsidies from their government to drop the prices of their containers when selling to U.S. Companies.

Wahlin said the market for such containers in the US is typically about 15 to 20-thousand each year.

The Chinese are providing a product at a particular price. At market price,” he said.

But when we come into the market right around that price... they're able to drop the price significantly to choke us out and basically eliminate the competition,” Wahlin said.

Wahlin said he suspects the Chinese manufacturers would then raise their prices back to the market rate after his company leaves the industry.

That led Stoughton Trailers to file an unfair trade petition with the U.S. Government in April. The company is accusing the Chinese container manufacturers of both dumping their products at very low prices and taking illegal government subsidies.

The International Trade Commission is investigating whether or not the market for the containers has been harmed due to the Chinese imports. Monday, the ITC issued a preliminary ruling indicating it has been. That gave the Department of Commerce the green light to begin its own investigation.

The DOC is looking into whether the Chinese companies are engaging in dumping by selling the trailers at unreasonably low prices. The DOC is also investigating whether or not the subsidies the companies are receiving from the Chinese government are illegal.

The International Trade Administration is committed to ensuring U.S. companies can compete on a level playing field in the global marketplace,” said a spokesperson for the ITA, a branch of the Department of Commerce, in a statement.

Commerce conducts all trade remedy investigations in an open and transparent manner in accordance with all U.S. statutes and international obligations,” the statement reads.

If the ITC and DOC investigations find fair trade practice violations, a duty, or tariff, would be applied to the Chinese imports. Tariffs would be calculated for both the dumping violation and the government subsidy violation if each is found to be true.

The DOC is at the moment gathering information from both Chinese manufacturers, the Chinese government and Stoughton Trailers in anticipation of issuing preliminary rulings for the alleged violations on July 17 and September 30.

A spokesperson for the DOC said, if the Chinese companies fail to respond, the organization would automatically affirm the allegations.

Wahlin said the 170 employees in Evansville currently churn out about 400, 53-foot dry containers each year. He said if duties are imposed on the Chinese manufacturers to “level the playing field” he would like to see the company boost its production to 10-thousand containers annually in the coming years.

Wahlin said that would require up to 400, additional workers to be hired in Evansville. He said that's one reason he filed the complaint.

It's worth it because of the 400 jobs we have the potential to create,” Wahlin said. “400 jobs support 400 families.”

Wahlin also said the companies trailer production divisions are doing quite well. He said Stoughton Trailers is currently hiring to fill trailer and chassis production jobs.
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