I think the kids of Laguna Beach High School need a cause. Send them door to door through the rich and robust California community with a giant sign strapped around their neck that reads: SAVE THE CEMENT CONSUMERS OF AMERICA. For those of you who are unaware of the fantasy-filled reality series hit on MTV, I’ll fill you in on all you need to know in just one sentence. “Laguna Beach: The Real O.C.” is about a group of high school seniors who have everything and know everything. Yes, I was suckered into the program while channel surfing on a cold winter day in the middle of February, but enough about my brain-dead weekend. If you ask me, this group is hard up for a chance to make a difference in the world. So let’s start them out with cement, and maybe it will provide them just enough motivation to take on the AIDS epidemic and world hunger in a few years.
The cement supply crisis is “The Real Deal” in the highway and bridge building industry. I wouldn’t necessarily place it in the same category as oil, where one day we will reach a peak in production and it will all come crashing down. I don’t think it’s quite at the level of the steel crisis of a year ago, where the advancing Asian market soaked the supply level to a scary low. However, the concern is enough to have it sprout up into the newswire every so often.
Late this past summer four Western governors—Bill Richardson of New Mexico, Jon Huntsman of Utah, Kenny Guinn of Nevada and Mike Rounds of South Dakota—placed a distress call to U.S. Commerce Secretary Carlos Gutierrez. This message in a bottle could not afford to get lost in the tide of politics. The group of state leaders was taking a hard-line stance against the tariff that restricts Mexican cement from entering the U.S. They were asking Gutierrez to lift it.
“If this shortage continues, thousands of jobs and millions of dollars in broken contracts will be at risk, and many small construction businesses could be forced out of business,” the governors wrote. “Public projects will increase in cost while failing to meet construction schedules.” The sense of urgency was expressed by many in the transportation construction industry. Stephen Sandherr, CEO of the Associated General Contractors of America, addressed the shortage with Gutierrez in a letter back in June.
“Since [the letter] the number of states in which shortages or tight supplies of cement are reported has risen to 30, plus the District of Columbia,” he said. “The long-awaited enactment of the surface transportation and energy bills will add to cement demand.
“It is high time for other cement producers to admit they are not being ‘injured’ by Mexican cement imports.”
While the governors were pleading in Washington, Albuquerque, N.M., Mayor Martin Chavez grabbed the reins of the problem and whipped a fast solution. Chavez announced in August he had brokered a deal with Chihuahua, Mexico-based Grupos Cementos de Chihuahua to ease rationing without significant price hikes. The deal involved the company importing extra cement from Mexico to bring the total supply up to about 90% of normal. The company also will temporarily absorb most or all of the steep tariffs on the imported supply.
Since the tariff was enacted in 1990 the market has changed faces. The demand in China, which is determined to build an interstate system in eight years, India and the dire effects of hurricanes Katrina, Rita and Wilma have turned cement supply into a luxurious commodity.
So why is this tariff, which is covered in a thick layer of aging failure, still active? The whole purpose of the tax is to protect the U.S. industry. Well, the U.S. industry, as far as cement goes, needs a doctor instead of a security guard. And what about the North American Free Trade Agreement? Doesn’t this tariff defy all means of trying to open the door to Canada and Mexico?
The time is now for nationwide relief. Don’t make me call in the Laguna Beach force.
