TPT January 2007

From the AMERICAS

From OregonLive.com: “Justice Department officials said (Schnitzer) realized $55 million in profits from the improper payments. At least $6.3 million in net profits came from bribes paid to government- owned business, which the (Foreign Corrupt Practices Act) expressly prohibits.” As part of its settlement with the SEC, Schnitzer agreed to hire an independent consultant to review the company’s policies and procedures. • On its own website, Schnitzer Steel Industries Inc plausibly describes itself as dealing in scrap metal ‘but on a massive scale’ . The company is one of the largest recyclers of ferrous metals in the US, a leading recycler of used and recycled auto parts through a chain of self-service auto parts stores, and a manufacturer of finished steel products. With joint venture partners, Schnitzer processes over 4.9 million tons of recycled metals a year. Company affiliate Cascade Steel Rolling Mills Inc has annual production capacity of 700,000t of finished steel products including concrete reinforcing bar, wire and coiled web, and fence posts. Located in McMinnville, Oregon, Cascade is believed by Schnitzer to be the only vertically integrated minimill in the American West: ie, capable of filling its entire feedstock requirement from company-related sources. Automotive notes › In response to declining demand by car makers for auto parts, American Axle and Manufacturing Holdings has offered union workers at five auto parts plants up to $100,000 to leave the company. About 6,000 members of the United Automobile Workers union in New York and Michigan are eligible for buyout or retirement packages, Detroit-based American Axle said on 4 October. Plans also call for salaried jobs to be cut as part of a North American restructuring, but no plants are scheduled to close. American Axle gets 77 per cent of its sales from General Motors Corp , which along with other US auto makers built fewer vehicles in the second half of 2006. American Axle builds almost all the axles for GM’s light trucks, a category in which GM’s sales declined 13 per cent last year. › Germany’s car makers are joining forces to promote clean diesel technology in the American market, the world’s largest. Spokespersons for Volkswagen and Mercedes parent

“We have prices about twice the long-term historical average for aluminium, which is quite positive for producers. The risk is on the demand side, where these high prices could be adversely affecting demand.” Aluminium commodity prices rose 37 per cent in the quarter, reaching their highest average level ($2,530 a metric ton) in at least 19 years, as output fell behind demand. Alcoa is expanding production in Australia and building smelters in countries with lower energy costs. Oregon scrap metal giant Schnitzer Steel to pay $15.2 million in penalties stemming from bribery charges A federal judge has found a subsidiary of Schnitzer Steel Industries Inc (Portland, Oregon) guilty of violating federal trade law by bribing steel mill managers in China and South Korea with cash and gifts to induce them to buy metals from the company and its Japanese customers. On 16 October, a US District Court judge in Portland imposed a $7.5 million penalty on Schnitzer for actions by its South Korean subsidiary SSI International Far East. Without admitting guilt, the company also agreed to a $7.7 million settlement with the US Securities and Exchange Commission. The SEC had accused Schnitzer and subsidiaries of violating the Foreign Corrupt Practices Act, an anti-bribery law, from 1999 to 2004. According to the website OregonLive.com, which features output from The Oregonian, a Portland-based daily, government officials said Schnitzer’s South Korean subsidiary made improper cash payments or gave gifts to managers of government-owned steel mills in China. A Schnitzer officer in Tacoma (Washington) and a senior executive in Portland were aware of and approved the payments, government officials said. The illegal payments and gifts are said to have been made on Schnitzer’s own behalf and on behalf of Japanese steel companies for which the Portland company acted as broker. Over the same period, officials said, Schnitzer also paid bribes to managers of privately owned steel mills in both China and South Korea to induce them to buy scrap metal from Schnitzer and its Japanese customers.

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J ANUARY /F EBRUARY 2007