U.S. tariffs on Canadian steel lead to $7M loss for Ampco-Pittsburgh
U.S. tariffs on imports of Canadian steel products have sent Ampco-Pittsburgh Corp. scrambling to stem higher costs from a plant in Ontario it purchased just two years ago, company executives said on Thursday.
The tariffs were a significant factor in a $7 million third-quarter loss, or a loss of 56 cents a share, recorded by Ampco-Pittsburgh, a Carnegie-based specialty steel manufacturer. That compared with a loss of $2.2 million, or 18 cents a share, during the three-month period one year ago.
The losses widened even as the company reported sales of $112 million in the third quarter, up 8 percent compared with the yearago quarter.
The Canadian subsidiary, called ASW Steel, sells the majority of its steel products in the United States, said Mike McAuley, the company’s chief financial officer.
“So with the tariffs, that’s obviously a negative development because there are alternatives for customers in the U.S. that they can seek — and that’s been an issue,” he said.
Ampco-Pittsburgh has filed for an exemption with the U.S. Department of Commerce for relief from the tariffs, which add a 25 percent penalty on steel imports into the United States. In the meantime, Mr. McAuley said, the plant is searching for more customers in Canada to avoid the tariffs altogether.
“In the quarter, we had higher sales of products in Canada,” Mr. McAuley said. “We’ve been expanding the Canadian order book for ASW Steel, which is a good thing because it ... prepares us for better balance for when the tariffs come off.”
CEO Brett McBrayer, who took the reins of the company in July, recently announced a restructuring of Ampco-Pittsburgh’s facilities, which have struggled to operate efficiently. In addition to tariffs, an equipment breakdown halted operations at a U.S. facility for a lengthy period in the third quarter, Mr. McBrayer said.
In the last four months, Mr. McBrayer has visited 13 facilities and several of the company’s major customers, he said. The first move was announced Nov. 1, with the sale of the Vertical Seal division of Akers National Roll Co., a subsidiary located in Pleasantville, Venango County.
The restructuring, which will include both asset sales and process improvements, will continue through 2019. The executives would not say whether ASW Steel, which Ampco purchased for $13.1 million in November 2016, could be sold or temporarily idled if the tariffs are not withdrawn.
Ampco-Pittsburgh supplies rolls used by steel and aluminum producers to flatten metal. The company also makes air and liquid processing equipment, heat exchange coils, air handling systems and centrifugal pumps.