When the Union and the Environmentalists Collide: the Bucyrus International-India Equipment Fiasco

The fun started when the Export-Import bank nixed Bucyrus International’s sale of mining equipment for an Indian power project:

On Thursday, the Export-Import Bank denied financing for Reliance Power Ltd., an Indian power plant company, effectively wiping out about $600 million in coal mining equipment sales for Bucyrus, chief executive Tim Sullivan said.

The fossil fuel project was the first to come before the government-run bank since it adopted a climate-change policy to settle a lawsuit and to meet Obama administration directives.

“President Obama has made clear his administration’s commitment to transition away from high-carbon investments and toward a cleaner-energy future,” Export-Import Bank Chairman Fred Hochberg said in a statement. “After careful deliberation, the Export-Import Bank board voted not to proceed with this project because of the projected adverse environmental impact.”

The bank’s decision is puzzling, Sullivan said, because the power plant will meet international standards and the bank’s environmental criteria.

The plant is under construction in Sasan, central India, and is scheduled to be up and running in 2012. Coal mining will take place for the plant whether it’s done with Bucyrus machines or equipment from China and Belarus, Sullivan said.

But criteria don’t matter to fanatics.  Capitalist roaders such as Bucyrus International are of no account to this administration.

Bucyrus International’s union, however, which does matter to this administration, had another opinion of this altogether:

Under growing pressure from Wisconsin leaders and union workers, the U.S. Export-Import Bank may reconsider its decision to deny loan guarantees for mining equipment that would be made in the Milwaukee area for supplying coal to a power plant in India, a bank official said Monday…

The president of the United Steelworkers of America called for a letter-writing campaign protesting the bank’s refusal to finance mining equipment that would be made by union members.

Union President Leo Gerard said he would ask that his union’s leaders and members write to their congressional delegations and the Export-Import Bank, urging the government-backed lender to reverse its decision.

He also urged Steelworkers to attend the town hall meeting Wednesday.

“At a time when we are losing good-paying jobs, and at a time when President Obama wants to double U.S. exports, how can the Export-Import Bank deny a loan that would create and protect jobs at Bucyrus International? It was a dumb decision,” Gerard told the Journal Sentinel.

It’s also noteworthy that most of Wisconsin’s political leaders, right at the moment, are Democrats.

I hope the union can make the right people in our government see daylight on this issue.  If not, the “Reagan Democrats” will ride again, and will have plenty of time for political activism, because they’ll be on the dole.

Bucyrus, for its part, obviously has a Plan B:

Bucyrus International, Inc., Wisconsin-based company with an annual turnover of around $2 billion, engaged in the design and manufacture of mining equipment, is setting up its India operations headquarters at Kolkata. The company is also actively considering setting up a manufacturing unit in the state. The company is on the lookout for an abandoned facility in West Bengal to set up a $5 million manufacturing unit. Over the next 5 years they plan to scale up the India operations and make it a 500-employee company.

Bucyrus plans to design and source parts and components from Kolkata that are required for the Indian mining industry as well as for their global requirements.  Bucyrus India Ltd, a 100 percent Indian subsidiary of Bucyrus International, Inc. already has a facility at Singrauli in Madhya Pradesh & Bangalore. According to  Timothy W. Sullivan, president and CEO of Bucyrus International, by the end of 2007 the company will have 3 other offices in India in Singareni (Andhra Pradesh), Singrauli (MP) and Southeastern Coalfields (Chhattisgarh).

The blunt truth is that our government has, for the most part, disdained heavy industry for most of my lifetime, which is why much of it has decamped for happier places.

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