Schumer: DOD Agrees that Military Steel Must be 100% Made in the USA, From Producers Like Klein Steel in Rochester - After Senator's Push, Feds Reverse Course From Rule that Would Have Allowed Military to Buy Steel From Around the Globe, Hurting Klein

Press Release

Today, U.S. Senator Charles E. Schumer announced that the Department of Defense (DoD) has heeded his call and restored the requirement that all U.S. military steel be 100% made in the U.S., boosting the strength of New York steel manufacturers like Klein Steel in Rochester. In 2009, the DoD changed the definition of "domestically produced" to mean that only the secondary finishing process would have to be done in the U.S., which has meant that foreign-made steel can enter the supply chain for armor plate being used on U.S. military equipment -- a threat to businesses like Klein Steel and to the integrity of the materials used to protect our military. Today, Schumer announced that the DoD has officially reinstated the old requirement, by publishing a new amendment to the Defense Federal Acquisition Regulations that alters that 2009 definition of "produced" to no longer include "quenching and tampering" of steel.

For 35 years, until 2009, the U.S. military received all of its steel from domestic producers, helping to create jobs at Klein Steel and other producers across the state. In the midst of the Iraq and Afghanistan wars when demand was soaring, the U.S. dropped the requirement, which forced Klein to compete with companies from around the world, including China, some of which do not play by global trading rules. Now that the Iraq war has ended and ample U.S. manufacturers exist to meet military's demand, Schumer announced that the Defense Department has now officially reinstated the old requirement, which will likely support new work at Klein, which currently employs over 150 people in Rochester.

"After a temporary departure in 2009, the Department of Defense has made an ironclad agreement to again manufacture our military's steel on American soil, and now more of it will be produced in Rochester at Klein Steel," said Schumer. "Rochester boasts some of the best manufacturers and steelworkers in the world and Klein Steel should not have to compete with China to produce steel for our troops' military equipment. I am pleased that the Department of Defense has heeded my call and will again require that 100% of U.S. military steel be produced right here at home, which will create jobs in Upstate New York and throughout the country."

At Schumer's urging, DoD has revised the definition of "produced" to delete the previous provision that defines the term to include the quenching and tempering of steel armor plate. Schumer noted that such a rule change is rare. This amendment means that U.S. military steel cannot be melted in countries with unlawful trade regulations, including China, and cannot simply receive steel finishing processes in the U.S. so as to comply with the rule that military steel be "produced" domestically. This new rule is a direct result of the Fiscal Year 2011 (FY12) National Defense Authorization Act (NDAA), in which Schumer joined his Congressional colleagues to call on DoD to review the current definition of "produce" to ensure that U.S. steelworkers were not losing jobs to companies overseas.

Klein Steel currently employs roughly 150 workers in Rochester, as well as 50 workers in its Buffalo subsidiary. Klein receives its melted raw steel from Nucor, a firm with facilities in Auburn NY, and then tempers and produces armor steel plates with a proprietary process that involves cutting and finishing the armor steel plate, called "Star Armor." This steel plate can then fit into military vehicles, such as the Humvee or be used to armor military installations and other military equipment. Star Armor is thinner and lighter than current steel armor, saving fuel since armored vehicles do not need to be as heavy, while still meeting performance targets. Moreover Star Armor is flexible and easier to weld, which makes it an improvement over other types of armor steel plate products.

Klein Steel is positioning Star Armor to become widely used throughout the U.S. military, and Schumer has sought to ensure that foreign steel melted abroad does not undercut the ability of Klein Steel and other U.S. producers' ability to compete and grow. Before 2009, DoD was required by law to purchase military steel that was 100% made in the U.S. Due to an increase in demand for steel in light of the wars in Iraq and Afghanistan, the Defense Department dropped the requirement, inviting competition from China and other global competitors who do not abide by the same rules as U.S. manufacturers like Klein. Chinese companies are notorious for undercutting U.S. prices on a range of goods by manipulating and devaluing their currency.

Founded in 1971, Klein Steel Service Inc. is the region's premier steel service center with six locations throughout New York. With over 3,200 line items of stock size carbon, stainless steel, and specialty metals, the company also offers a full range of value added processing and a fully integrated distribution network that extends the Klein Steel reach throughout the country. Klein Steel is acknowledged as an innovator and industry leader, having been named to the "Rochester Top 100" multiple times along with honors as one of New York's Best Companies to Work For in 2010.

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