16 ms·

US Steel, once the largest corporation, agrees to sell to Nippon Steel

205 points by ryzvonusef 3y ago

ryzvonusef 3y ago
> US Steel has agreed to be bought by Nippon Steel, Japan’s largest steelmaker, in a $14.1 billion deal. > Earlier this summer the United Steelworkers union vowed to only support a proposed offer by another unionized American steel company, Cleveland Cliffs, to buy US Steel, in a cash and stock deal then valued at $32.53 a share, or 40% less than Nippon’s all cash offer. The US Steel board rejected that offer and started considering other bids. > The union, which has 11,000 members at US Steel, attacked the Nippon Steel deal on Monday. > “To say we’re disappointed in the announced deal between U.S. Steel and Nippon is an understatement, as it demonstrates the same greedy, shortsighted attitude that has guided U.S. Steel for far too long,” said USW President David McCall. “We remained open throughout this process to working with U.S. Steel to keep this iconic American company domestically owned and operated, but instead it chose to push aside the concerns of its dedicated workforce and sell to a foreign-owned company.” > The union made clear it hopes to block the deal.
- ryzvonusef 3y ago
  on why it failed: > US Steel and other steelmakers eventually followed those foreign competitors to upgrade factories and equipment, but they still largely used the older methods to make steel by melting raw materials such as iron ore in giant blast furnaces. > Those “integrated” steelmakers soon lagged behind so-called “mini-mills,” nonunion competitors that use more efficient electric arc furnaces to turn old steel scrap from discarded cars and other products into new steel products. > US Steel didn’t open its first electric arc furnace until 2020. So the question is... did unions prevent a path to upgradation to new tech?
  - Mountain_Skies 3y ago
    Quite possibly, especially if skills from old method aren't easily transferrable to the newer methods. There could also be issues with capital concerns, both finance and tax related. Perhaps a combination of all of them.
  - noelwelsh 3y ago
    Maybe they did and maybe they didn't. Nice example of biased journalism though, suggesting an association but providing no evidence for it.
  - adastra22 3y ago
    Yes, absolutely.
    - MisterTea 3y ago
      [citation needed]
      - adastra22 3y ago
        Seriously? What citation is needed? The unions are why they didn’t switch to a less labor-intensive process. How is that a controversial statement?
        deleted 3y ago
        [deleted]
        wmeredith 3y ago
        A comment above yours says that these scrap-processing mini-mills are more labor-intensive to operate, which is why most of them are in China. So... yes, seriously, a citation is needed for your claim.
        MisterTea 3y ago
        Yes seriously. You backed up your answer with nothing.
        greenie_beans 3y ago
        it's not controversial. you just didn't prove it. you said "yes, absolutely" as if it's universal truth, without any evidence.
        Kon-Peki 3y ago
        Electric arc furnaces don't necessarily reduce union labor needs. They reduce the amount of energy needed and reduce the carbon emitted and are simpler to operate (yes, fewer people). But the newfound flexibility and utilization that they provide generally increases the number of union laborers the steel mill employs. The IBEW brings union workers in from multiple states and puts them up in temporary housing just to build these things as fast as possible. Everybody wants them, they are just so incredibly expensive at the size that US Steel needs.
  - Supermancho 3y ago
    > Those “integrated” steelmakers soon lagged behind so-called “mini-mills,” nonunion competitors that use more efficient electric arc furnaces to turn old steel scrap from discarded cars and other products into new steel products This means "chinese" mini mills^1 which require a lot of manual labor to collect the steel. This is not a technology problem, but a manpower/safety race to the bottom, that the US couldn't effectively participate in. Unions may have prevented useful compromises, granted. New technology was not a priority, because it wouldn't help the situation. It's not like steel makers stopped doing cost/benefit analyses for decades. A Japanese owner looks like a strategic political move, given Japan's place in the world theater. The tariffs against steel were removed for the US and Japan at the same time circa 2022. Coincidence? ^1 https://www.reuters.com/article/us-china-steel-overcapacity-factbox/factbox-a-history-of-chinas-steel-sector-idUSKCN0XA03A/ https://www.reuters.com/article/us-china-steel-overcapacity-...
    - Aunche 3y ago
      The Reuters article is just a history of Chinese steel production. It doesn't support anything you said. According to the CNN article, Nucor, an American non-unionized American company, is successfully utilizing mini-mills. > One pioneer of this mini-mill technology, Charlotte-based Nucor has a market capitalization of $42.5 billion compared to US Steel’s value of just over $14 billion as set by this deal. > Nucor is also the largest steelmaker in America by output, making an estimated 20.6 million metric tons of steel per year, ranking 16th largest in the world. That compares to 14.49 million metric tons from US Steel, including its operations in Europe, which rank 27th in the world for 2022, according to the World Steel Association.
      - deleted 3y ago
        [deleted]
      - Supermancho 3y ago
        >> It doesn't support anything you said > What China could not achieve by Stalinist state planning or Maoist revolutionary enthusiasm, it achieved by letting a million private-sector smelters bloom. Good luck with whatever.
  - bombcar 3y ago
    The glaring issue I see is that if "integrated" mills start shutting down, where will the old steel scrap for the mini-mills eventually come from? Someone somewhere has to be making new steel.
    - bushbaba 3y ago
      Or if demand for steel increases
    - piuantiderp 3y ago
      Don't worry middle-class and below in the future will: not be able to buy cars, not able to use fossil fuel in any way, very limited in what steel products they can buy.
    - aziaziazi 3y ago
      From a quick search, China have some integrated Mills. This one is operated in Taiwan: https://en.m.wikipedia.org/wiki/China_Steel https://en.m.wikipedia.org/wiki/China_Steel
    - gourabmi 3y ago
      Short Answer : New steel is coming from overseas. I think regions / steel industries in the region go through phases. I can draw upon my experience with one of the biggest steel manufacturers in India and Europe. SE Asia is going through a phase where most of the steel consumption is met by primary steel, new steel made from blast furnaces consuming iron ore. A lot of that steel is exported but there is a very big domestic market. The need for secondary steel (made from old steel scraps) will become important in the future for SE Asia. Back in the US, this is already the case. Primary and Secondary steel have different properties. Secondary steel can not be used for some applications, they can only use Primary. Vice versa, using primary steel for some applications might not be economically feasible for some applications.
    - dr-detroit 3y ago
      [dead]
    - transcriptase 3y ago
  - RetpolineDrama 3y ago
    >So the question is... did unions prevent a path to upgradation to new tech? Of course they did. It's even worse in legacy auto, Engineering has to get approval from the union for any significant new vehicle features.
    - hef19898 3y ago
      That is some realy bold claim, any sources for that?
    - tehjoker 3y ago
      probably bc there are safety and other concerns that need to be addressed? management gets to check that off why not the people building it?
      - AlbertCory 3y ago
        " other concerns " doing a lot of work there. What other concerns? Is "how many people get employed, and at what salaries" one of them?
  - hef19898 3y ago
    Isn't that one of the case studies in the Innovator's Dilema? I don't remember any mention of unions in that.
  - scythe 3y ago
    It's not exactly unheard of. One feature that makes unions in the United States different from other countries is that they tend to have a more adversarial relationship with employers and the government. Sectoral bargaining is very rare, if it exists at all. Union laws are a patchwork of left- and right-wing administrations' attempts to undermine each other. American culture, in particular the prominence of Manichaean narratives, may play a role in making different groups see each other as "evil" and willing to do underhanded things, whether it's the UFCW planting an ABC news story about Food Lion or Amazon ignoring labor laws to fire unionizing workers. The teacher's union and police union serve as bogeymen for one or the other political party. Advocating compromise is often met with scorn.
    - hef19898 3y ago
      And none of what you said has anything to do with US Steel, so your point is?
  - hammock 3y ago
    Not unions solely, but as other commenters have pointed out, the cost of labor more generally is what did it. And the comparative cost of labor in e.g. China vs. US is driven by the balance of trade. Expensive labor is the price the US pays to run a trade deficit
  - analog31 3y ago
    The question is... who's going to smelt iron ore? In fact I think it was the head of US Steel, who put it succinctly several years ago: Somebody has to turn iron ore into iron.
    - ethbr1 3y ago
      A huge amount of global iron ore comes from Australia. [0,1] And globally in descending reserves order: Australia, Brazil, Russia. China's extraction:reserves ratio is much higher and will exhaust reserves much quicker than the others. So it'd make more sense to smelt it close, given the volume/weight ratio of ore to refined material. Transport by sea... but that's still A LOT of tonnage to move ore. [0] https://www.statista.com/statistics/267381/world-reserves-of-iron-ore-by-country/ https://www.statista.com/statistics/267381/world-reserves-of... [1] https://en.m.wikipedia.org/wiki/List_of_countries_by_iron_ore_production https://en.m.wikipedia.org/wiki/List_of_countries_by_iron_or...
  - pauljonas 3y ago
    It's been a few decades but I worked for USS as a developer, after attaining a computer science degree. I know it's a tired old adage that labor / labor unions was the reason for American steel manufacturing decline and rise of Japanese dominance. But from the inside, that simply wasn't so -- it was more a case that Japanese mills not only more modern but the entire manufacturing process, from casting to finished product, was more efficient. Even when new US mills gained new technology, it wasn't thought through and decisions seemed to be made the basis of old boy network than solid business acumen.
    - chaostheory 3y ago
      But weren’t the unions also against changing the process?
      - pauljonas 3y ago
        No. These factors that I'm speaking of were more along the lines of: - a slab caster implemented, but there is already a bloom caster and only one crane facility to support both so both ran at less than optimal throughput. - choosing to prioritize far less profitable slab casting for output to a joint venture plant in CA than very profitable bloom casting (& union definitely not in favor of this) - buying coke at 10X price they could get elsewhere because old buddy favoritism Basically, the Japanese firms were built a much more holistic basis -- JIT engineering, so that liquid is pored, slabs created and were delivered right into finished product processing. Whereas, by contrast, in the mill I worked at, slabs would be cast, then would cool in a yard, heated & slitted, then heated again for strip mill processing (it cost quite a bit of energy to heat to 2200/2300 degrees). I mean, my boss & I would even spitball on how much better the place would run if it was bought out and run by (at that time, late 80s / early 90s) a foreign competitor that made decisions on business sense rather than old boy political network machinations. Basically, all about: MANAGEMENT, MANAGEMENT, MANAGEMENT.
  - bsder 3y ago
    > So the question is... did unions prevent a path to upgradation to new tech? Not really? The difference is referred to as "primary" vs "secondary" steelmaking. The US pumped out enormous quantities of steel from 1910-1980ish and then usage decreased as better computer models as well as plastics allowed a lot more efficient use of the material. This meant that a bunch of used steel was available and nobody could really consume steel fast anymore. Consequently, "secondary" small mills recycling used steel were WAY more profitable than "primary" large mills making it from ore. This devastated the US steel industry which was mostly "primary" (some of that has changed). Then ... China ... started consuming vast quantities of steel for development. At some point, China bought up and used most of the used steel that was available. So ... today ... "secondary" steel is rising because the cheap used steel isn't laying around anymore. "Primary" steel is making a comeback as you need to produce original feedstock or the "secondary" producers have nothing to work with. The correct answer to all this is: it's a balance. You need some primary steelmaking or you simply run out of feedstock. You need some secondary steelmaking to tweak the type of steel and provide smaller, specialty runs.
- JKCalhoun 3y ago
  Finger pointing aside, this does seem like a sad outcome for the U.S.
- lokar 3y ago
  Honest question: are Japanese industrial workers (steel, auto, etc) significantly worse off (pay, conditions, security, etc) vs Americans? I sort of assume that at this point they are an advanced economy and there would be roughly parity.
  - jessriedel 3y ago
    Wages are lower in Japan, so I'm pretty sure the Japanese workers are paid less. Working conditions and job security are probably the same or better.
    - zbyte64 3y ago
      Job security is way better, work conditions are debateable because of a "work till you die" work culture.
      - lokar 3y ago
        Meaning no retirement?
  - ska 3y ago
    > roughly parity. There is quite a bit of variability in these things among say G7 or G20 countries. Americans on the whole typically have higher net, higher volatility, lower security, for example. It gets complicated when you try and do "whole picture" comparisons (e.g. how to factor in state pensions/health care/etc.) but the dominance of the US economy worldwide and $ function as a reserve pays a very real divided to nearly everyone.
- Der_Einzige 3y ago
  This btw is why Japanese cars are better than American cars. It's objectively better to work in a unionized environment. Let's you be "lazier" and get away with half-asserey - great from the worker perspective but from the perspective of a prospective buyer, ideally your product is produced by people who work as hard as possible. The Japanese have a work-hard without half-assing attitude. This is why Toyota/Lexus have consistency the best build quality, stitching, etc in their cars. Their employees are mostly not unionized and not even paid particularly better than the American ones - but the Japanese work ethic is preserved. This is also why "made in japan" toyota/lexus is prefereed to made in america/canada toyota/lexus.
  - hef19898 3y ago
    The only thing correct in your statement is the spelling of Toyota and Lexus, and even that you only nailed one out of three times (brand names start with capitals, even in English).
    - Der_Einzige 3y ago
      Maybe you could stop being lazy and explain specifically why what I claimed was wrong. But you can't, because you're wrong and you know it.
      - hef19898 3y ago
        Car build quality has nothing to do with unions for example, and that unions allow workers to be lazy is such wrong statememt, I din't even know where to start. US car makers were always bad when it came to quality, unions or not since Tesla is no difference. Build quality doesn't come from "working ad hard as possible", in general quality is indorectly proportional to the amount of hustling people do, voluntary or othetwise. Build quality in anything assembeld comes from proper engineering, proper assembly procedures, properly trained staff, solid quality culture (guess where the Japanese traditionally excel) and a quality focused organisation. None of those have anything to do with unions, half-assery or anything else you brought up.
  - 3y ago
- gunapologist99 3y ago
  > We remained open throughout this process to working with U.S. Steel to keep this iconic American company domestically owned and operated, but instead it chose to push aside the concerns of its dedicated workforce and sell to a foreign-owned company ... for more than twice as much! He kinda left the part out.
  - tshirthoodie 3y ago
    >He kinda left the part out. It's irrelevant because the workers won't see a penny of any of it. You kinda left that part out.
    - gunapologist99 3y ago
      Why would that matter to the workers? They'll still get the same exorbitant salary that they negotiated. They could have invested in their employer just like anyone else.
      - nobodyandproud 3y ago
        What is the amount of exorbitant salary?
- deleted 3y ago
  [deleted]
eunos 3y ago
After being coddled up by the govt for so many years (NatSec tariffs, tax breaks, bailouts, import restrictions, etc), ultimately it still failed.
- FredPret 3y ago
  US Steel hasn't failed, it's been pumping out money for a long time. $1.6B in profit in the last 4Q's on a market cap of $9B. It's far from dead - leverage is only 45%; they've got $11B in equity in the company. [https://valustox.com/X https://valustox.com/X]
  - kranke155 3y ago
    One more misinformed HN top comment.
    - wmeredith 3y ago
      Please illuminate us. How is this misinformed?
      - hef19898 3y ago
        A profitable company is hardly a failure. Or maybe it is, after all HN is more into VC-miney-burning-to-buy-wannabe-monopoly "tech" start-ups.
      - kranke155 3y ago
        Top comment said the company was a failure. Doesn´t seem to be the case, since the company was clearly profitable.
        verdverm 3y ago
        Shrinking and laying off workers is rarely seen as successful. You can play games and look/stay profitable all the while the real story is far from it. Success is typically seen as something that is improving, whether profit or market share. Shrinking while still remaining profitable sits in a more gray zone. I think most don't see this as successful, but I wouldn't call it a complete failure either, unless you consider selling a local company to a foreign company a failure.
Pxtl 3y ago
FFS, they bought up and ruined Stelco here in Hamilton (Canada's Pittsburgh) just to loot its customer-list and they still failed anyways?
- jeffbee 3y ago
  They bought bits and pieces of Stelco out of bankruptcy. It seems as if it was pre-ruined before USS owned it.
astrea 3y ago
This will be another huge hit to what I call “Old Pittsburgh”. It’s still very much a steel city, especially in the South Hills. Interested to see that how it impacts the local economy.
- coffeeshopgoth 3y ago
  As someone from the South Hills area, I, too, am interested in seeing how this goes...Pittsburgh has really changed over the past 30-40 years, replacing a massively overwhelming population of blue collar jobs with white collar (mostly doctors and lawyers). I know a lot of folk who work at/have worked at U.S. Steel and hope the transition works out for them.
- was8309 3y ago
  by south hills, guessing you mean the Mon Valley?
  - sjs382 3y ago
    South Hills is the southern suburbs. Bethel Park, South Park, Dormont, Castle Shannon, Mt Lebanon, etc.
nowbabynow 3y ago
[dead]
topkai22 3y ago
The insane conspiracy theorist in me immediately started thinking Elon Musk is behind this so he can get the ticket symbol (US steel is X on the NYSE.)
- dllthomas 3y ago
  I've been making the same joke. I also laughed a lot when some article described someone (Fetterman?) commenting "in a post on X"
- arduanika 3y ago
  Would be quite the steel.
codexb 3y ago
Didn't the US government stop this exact same thing from happening 20 years ago over national security concerns?
- h2odragon 3y ago
  an easy response is "Our government no longer believes steel is critical to our national security" Cant find mention of US steel being sold, perhaps this? > In 1984, the federal government prevented U.S. Steel from acquiring National Steel, and political pressure from the United States Congress, as well as the United Steelworkers (USW), forced the company to abandon plans to import British Steel Corporation slabs https://en.wikipedia.org/wiki/U.S._Steel https://en.wikipedia.org/wiki/U.S._Steel
  - vasco 3y ago
    The country that will acquire is also important in this equation. Russians were blocked from buying Oregon steel for example. Japan is more like a protectorate of the US than a fully independent country post WW2, with specific articles of the constitution that block army sizes, specific military equipment, agreements for maintenance of permanent US bases and troops in the country etc. Even when recently they decided to re-interpret these articles this was done only with the express permission of the US.
    - xp84 3y ago
      True that there is no more loyal ally than Japan aside from perhaps Canada. Kind of miraculous that that happened, honestly, considering that the phase of our relationship immediately before this was "fighting to the death" followed by "atomic bomb dropping" -- but I'm grateful that somehow it has come to be an enduring friendship both politically and really culturally as well.
      - vasco 3y ago
        I mean, the US did a huge occupation and education campaign which depending on how you categorize "force someone to keep your army within their borders" could even be seen as them not actually being sovereign. People are fast to forget that part the same way they forget Poland was only liberated truly in 1989, it's not such a good story when you include those parts.
eej71 3y ago
For a fascinating read about Nucor, the competitor that surpassed US Steel, I'd recommend Richard Preston's American Steel.
- ProllyInfamous 3y ago
  tl;dr: US didn't update to "modern" induction furnaces until 2020, decades after most of global foundries did so. Failure to innovate == failure.
pandemicsyn 3y ago
This will be interesting. I wonder what will happen to Dr Larrin Thomas (https://knifesteelnerds.com/about-me/ https://knifesteelnerds.com/about-me/) he's been able to bring some new knife steels to market while working for US Steel by day. Wonder if Nippon allows side gigs.
- hef19898 3y ago
  I do have a bar of 40-layered high-carbon steel from Nippon Steel and another one of white-paper-and-low-carbon-steel with a iron (!) core from Hitachi in the basement waiting to be forged into swords. So, going from that, I think the Japanese (!) management should be fine, the local US management might different so. Thanks for the link, some great resources on that site!
  - riversflow 3y ago
    If you are new to knifesteelnerds, but not steel in general, and like blades, don’t just check out the site, make a beeline to read about Magnacut. Super cool and exciting.
syntaxing 3y ago
They didn’t inform the Union about it nor get its approval. I highly doubt the government will allow this deal to go through.
- incognition 3y ago
  Are you a lawyer? merger Arbitrage
nickpinkston 3y ago
I'm interested in how the United Steelworkers thinks about the generally better track record of Japanese companies with labor relations vs. American management. This makes it seem like it was purely an "American First" kind of sentiment, whereas I could imagine this being better for the workers themselves. This then makes me wonder if the Steelworkers is more company union (ie their leaders are bought off / cushy with management with lots of perks) or if this was put to the vote by the general union membership, etc.
- Macha 3y ago
  I don't think that applies as much to line workers in the overseas subsidiaries of Japanese companies as it does in the central company. Like, Square Enix's former European divisions, Sony of America, all run much more like companies in their home countries than like their parent company.
  - nickpinkston 3y ago
    I believe Toyota @ NUMMI actually showed that they could win over the union and get everyone bought into their lean culture, but it took time / patience. Notably, this plant was considered a failure before because the of the antagonism between labor/mgmt led to really toxic behavior. GM blamed the union labor, but Toyota ended up firing the managers and got buy in from labor because of their long-term / labor-centric culture, including more empowerment, respect, high quality training, etc. https://www.lean.org/the-lean-post/articles/how-nummi-changed-its-culture/ https://www.lean.org/the-lean-post/articles/how-nummi-change...
    - AlbertCory 3y ago
      And yet NUMMI failed. https://www.popularmechanics.com/cars/a5514/4350856/ https://www.popularmechanics.com/cars/a5514/4350856/ Then the building became Solyndra, which also failed. GM, of course, is one of the stupidest companies on Earth, so they'd have trouble selling free beer to college football fans. If you want to blame them you won't get any argument from me.
megaman821 3y ago
There is a 25% tariff on steel imports and American steel companies are still failing. What did the tariffs do other than raise prices of steel for Americans?
- christophilus 3y ago
  Nucor looks like it's doing OK.
- tw04 3y ago
  One American steel company is "failing". And by "failing" you mean still producing billions in profit every year, leadership just decided they wanted to cash out. https://www.google.com/finance/quote/X:NYSE https://www.google.com/finance/quote/X:NYSE
RecycledEle 3y ago
[flagged]
- NoMoreNicksLeft 3y ago
  > We were ignored, slandered, and our votes were never counted. Literally, the State of Texas does not count votes in Presidential Elections for "third parties." You understand that's by design, right? In most states (likely all, but I can't be bothered to check if there's an exception), a candidate has to register as a "write-in candidate" or votes writing in their names won't be counted at all. Ostensibly, this was done when people were actually writing on paper, and it might be impossible to count 100,000 unique write-in names if 100,000 voters voted for unique names. Now, in the digital/electronic voting machines where there would never need to be separate first class candidates and second class "write-in" candidates, the system is preserved for whatever reason.
  - RecycledEle 3y ago
    I mean there are 4 people on the ballot for POTUS, or you can request a write-in ballot. If you vote for anyone outside the D/R establishment, they reject your ballot.
    - dragonwriter 3y ago
      > I mean there are 4 people on the ballot for POTUS, or you can request a write-in ballot. If you vote for anyone outside the D/R establishment, they reject your ballot. Two of the four parties on the ballot are “outside the D/R establishment” (the four parties being the Democrats, Republicans, Libertarians, and Greens.) Additionally, its possible for other parties to qualify for ballot access, neither the number nor the identity of the qualified parties is fixed.
- achandlerwhite 3y ago
  No blame for the corporations outsourcing jobs and suppliers to save a few bucks for their executives and investors?
happytiger 3y ago
This is very bad for America. We need to keep some degree of industrial steel capacity capabilities in house. For perspective, the vast majority of global steel capacity is in China, which made over half of global steel output in 2020 (its almost a trillion dollar market), while the United States accounted for approximately 4%. I mean Nippon is a great company, but this is a critical piece of infrastructure at a time when things aren’t going exactly perfectly in the world.
- pjscott 3y ago
  How in-house does it need to be? The actual physical facilities aren't being shut down; they're just under new ownership and management. And Nippon Steel is located in Japan, which is such a dependable ally of the US that I'm politely trying not to use the phrase "vassal state." Also in the US, we've got Steel Dynamics (producing 75% as much as US Steel), Cleveland-Cliffs (approximately tied with US Steel), and Nucor (about 157% as much). That's not the whole story, of course -- Nucor primarily recycles scrap steel, for example, as opposed to smelting ore -- but I'm not really seeing a crisis anywhere on the horizon here. (My opinion in this paragraph is less confident than the first, so I'm open to correction from someone who knows more about the steel industry.)
  - TedDoesntTalk 3y ago
    US Steel was a major contributor of steel for the WWII military machine. Honest question: if WW3 were to start, would we be able to appropriate Nippon-owned USS factories for wartime use?
    - klooney 3y ago
      Yes- everything on US soil is uh, vulnerable to the national guard showing up with tanks and giving orders.
    - happytiger 3y ago
      So, this is an interesting question and one which I watched unfold in COVID times. The law that would specifically come into play here is called the Defense Production Act, and it’s complicated. Here’s a great overview: https://www.cfr.org/in-brief/what-defense-production-act https://www.cfr.org/in-brief/what-defense-production-act For more specifics, I would look at this overview which is excellent: https://www.businessdefense.gov/ibr/mceip/dpai/dpat3/docs/DPA-TitleIII-Overview.pdf https://www.businessdefense.gov/ibr/mceip/dpai/dpat3/docs/DP... In wartime, seizing capacity from an ally is… problematic. That’s my concern. What is technically possible isn’t necessarily diplomatically viable, and there are quite a few layers of laws here.
Hadriel 3y ago
Isn't it really ironic the names of these corps
pinewurst 3y ago
Compare the $14B cost of USS with the $44B paid (stupidly) for Twitter
- FirmwareBurner 3y ago
  You can't push ads on steel.
  - hef19898 3y ago
    Not yet.
    - fomine3 3y ago
      Great idea
pjmlp 3y ago
I guess steel isn't considered a critical asset for US industry to be in foreign hands.
- deleted 3y ago
  [deleted]
- WhereIsTheTruth 3y ago
  My theory is they want to use Japan do R&D to green-wash their steel industry and to absorb all of the related costs, they'll then get it back with bunch of new IPs as a result, Japan is.. hum.. kind https://www.wsj.com/articles/green-steel-is-coming-europe-is-leading-the-charge-thanks-to-new-carbon-taxes-886c77b6 https://www.wsj.com/articles/green-steel-is-coming-europe-is... China also doing its moves to lead
araes 3y ago
Other supplementary info: Steel Ind. Summary, 2021: https://www.trade.gov/sites/default/files/2021-03/exec%20sum-March%202021.pdf https://www.trade.gov/sites/default/files/2021-03/exec%20sum... World Steel Production, Last 50 Years: https://elements.visualcapitalist.com/50-years-of-global-steel-production/ https://elements.visualcapitalist.com/50-years-of-global-ste... Steel Crisis and Aftermath: https://en.wikipedia.org/wiki/Steel_crisis https://en.wikipedia.org/wiki/Steel_crisis World Steel Production since 1800's: https://www.researchgate.net/publication/343071585/figure/fig1/AS:916467897860097@1595514382257/World-steel-production-historical-data-from-3.png https://www.researchgate.net/publication/343071585/figure/fi... How Steel Production Trends with GDP: https://upload.wikimedia.org/wikipedia/commons/thumb/a/a2/Steel_production_and_GPD_per_capita.svg/1920px-Steel_production_and_GPD_per_capita.svg.png https://upload.wikimedia.org/wikipedia/commons/thumb/a/a2/St... Current Numbers, 2023: https://worldsteel.org/steel-topics/statistics/steel-data-viewer/ https://worldsteel.org/steel-topics/statistics/steel-data-vi... Above, Charted Geographically: https://worldsteel.org/steel-topics/statistics/annual-production-steel-data/?ind=P1_crude_steel_total_pub/CHN/IND https://worldsteel.org/steel-topics/statistics/annual-produc...
- deleted 3y ago
  [deleted]
Apocryphon 3y ago
The '80s are back!
georgedegennaro 3y ago
Why is jingoism normalized when it is in defense of labor?
returnofzyx 3y ago
We're bigger than US Steel. First sentence that raced to my mind when I saw this. Hyman Roth; legend.
arduanika 3y ago
Will the NYSE ticker 'X' become free now? Paging Elon Musk...
zackmorris 3y ago
Kind of ironic to be arguing about capitalism vs socialism while a foreign company buys the means of production out from under us. This was all predicted by academics in the late 70s and early 80s. Reagan's trickle-down economics was designed to halt wage increases so that capitalists could collect worker productivity and control the money supply. Then invest those capital gains in regulatory capture to install right wing cronies to carry out the amoral aims of corporations to remove all labor and environmental protections to maximize profit. Allowing the national debt (currently $30+ trillion) to be run up above GDP, making it easier to sell the public on selling off public lands and other resources from the commons to pay it off. Eventually undermining democracy enough to form a constitutional convention to restructure the federal government as a patriarchal society like the Republic of Gilead in The Handmaid's Tale, at the top of a New World Order controlled by wealthy financiers. The sale of US Steel to Nippon Steel should probably have been stopped due to national security concerns. It's especially troublesome that it happened on Biden's watch. But that's how all of this works. In post-New Deal politics, the economy gets targeted during democratic administrations to undermine it enough that people vote for republicans. Then republican administrations run up the debt further to roll out more of their programs while nobody is looking. The worse things get, the more the public votes against its own self-interest. Rinse, repeat. The public never catches its breath long enough to figure it out, so we're still caught in this dysfunction in 2023. I only mention this because I believe that this endgame transcends politics, in the way that pushing a Monopoly board off the table transcends the game itself. We're at a point now where the democratic party as it was once known probably no longer exists, and can be thought of as the 1980s republican party, favorable to corporations, gentrification, tax cuts for the wealthy, neoliberalism, colonialism, exploitation, etc. The republican party today works more like a line of succession, where the vice president is the man behind the curtain, and each level below contains leaks through PR and ownership of the mass media to keep the public in the dark while it's being fleeced. So democrats are in the business of losing while republicans are in the business of winning, while both sell out to the highest bidder. With the Boomers retiring and Gen X not wanting to pursue revisionist history fever dreams, Millennials and Gen Z are in a unique position to stop what seems inevitable now. I could see a return to middle class strengthening, sort of an Atlas Shrugged but from a government captured by capitalism: https://time.com/6343967/bidenomics-is-real-economics/ https://time.com/6343967/bidenomics-is-real-economics/ A plainspoken take on the dysfunction: https://www.tiktok.com/@watchfulcoyote/video/7311503851977215274 https://www.tiktok.com/@watchfulcoyote/video/731150385197721...
LanzVonL 3y ago
We should have sold it to China instead.

205 points by ryzvonusef 3y ago

> US Steel has agreed to be bought by Nippon Steel, Japan’s largest steelmaker, in a $14.1 billion deal. > Earlier this summer the United Steelworkers union vowed to only support a proposed offer by another unionized American steel company, Cleveland Cliffs, to buy US Steel, in a cash and stock deal then valued at $32.53 a share, or 40% less than Nippon’s all cash offer. The US Steel board rejected that offer and started considering other bids. > The union, which has 11,000 members at US Steel, attacked the Nippon Steel deal on Monday. > “To say we’re disappointed in the announced deal between U.S. Steel and Nippon is an understatement, as it demonstrates the same greedy, shortsighted attitude that has guided U.S. Steel for far too long,” said USW President David McCall. “We remained open throughout this process to working with U.S. Steel to keep this iconic American company domestically owned and operated, but instead it chose to push aside the concerns of its dedicated workforce and sell to a foreign-owned company.” > The union made clear it hopes to block the deal.

ryzvonusef 3y ago
on why it failed: > US Steel and other steelmakers eventually followed those foreign competitors to upgrade factories and equipment, but they still largely used the older methods to make steel by melting raw materials such as iron ore in giant blast furnaces. > Those “integrated” steelmakers soon lagged behind so-called “mini-mills,” nonunion competitors that use more efficient electric arc furnaces to turn old steel scrap from discarded cars and other products into new steel products. > US Steel didn’t open its first electric arc furnace until 2020. So the question is... did unions prevent a path to upgradation to new tech?
- Mountain_Skies 3y ago
  Quite possibly, especially if skills from old method aren't easily transferrable to the newer methods. There could also be issues with capital concerns, both finance and tax related. Perhaps a combination of all of them.
- noelwelsh 3y ago
  Maybe they did and maybe they didn't. Nice example of biased journalism though, suggesting an association but providing no evidence for it.
- adastra22 3y ago
  Yes, absolutely.
  - MisterTea 3y ago
    [citation needed]
    - adastra22 3y ago
      Seriously? What citation is needed? The unions are why they didn’t switch to a less labor-intensive process. How is that a controversial statement?
      - deleted 3y ago
        [deleted]
      - wmeredith 3y ago
        A comment above yours says that these scrap-processing mini-mills are more labor-intensive to operate, which is why most of them are in China. So... yes, seriously, a citation is needed for your claim.
      - MisterTea 3y ago
        Yes seriously. You backed up your answer with nothing.
      - greenie_beans 3y ago
        it's not controversial. you just didn't prove it. you said "yes, absolutely" as if it's universal truth, without any evidence.
      - Kon-Peki 3y ago
        Electric arc furnaces don't necessarily reduce union labor needs. They reduce the amount of energy needed and reduce the carbon emitted and are simpler to operate (yes, fewer people). But the newfound flexibility and utilization that they provide generally increases the number of union laborers the steel mill employs. The IBEW brings union workers in from multiple states and puts them up in temporary housing just to build these things as fast as possible. Everybody wants them, they are just so incredibly expensive at the size that US Steel needs.
- Supermancho 3y ago
  > Those “integrated” steelmakers soon lagged behind so-called “mini-mills,” nonunion competitors that use more efficient electric arc furnaces to turn old steel scrap from discarded cars and other products into new steel products This means "chinese" mini mills^1 which require a lot of manual labor to collect the steel. This is not a technology problem, but a manpower/safety race to the bottom, that the US couldn't effectively participate in. Unions may have prevented useful compromises, granted. New technology was not a priority, because it wouldn't help the situation. It's not like steel makers stopped doing cost/benefit analyses for decades. A Japanese owner looks like a strategic political move, given Japan's place in the world theater. The tariffs against steel were removed for the US and Japan at the same time circa 2022. Coincidence? ^1 https://www.reuters.com/article/us-china-steel-overcapacity-factbox/factbox-a-history-of-chinas-steel-sector-idUSKCN0XA03A/ https://www.reuters.com/article/us-china-steel-overcapacity-...
  - Aunche 3y ago
    The Reuters article is just a history of Chinese steel production. It doesn't support anything you said. According to the CNN article, Nucor, an American non-unionized American company, is successfully utilizing mini-mills. > One pioneer of this mini-mill technology, Charlotte-based Nucor has a market capitalization of $42.5 billion compared to US Steel’s value of just over $14 billion as set by this deal. > Nucor is also the largest steelmaker in America by output, making an estimated 20.6 million metric tons of steel per year, ranking 16th largest in the world. That compares to 14.49 million metric tons from US Steel, including its operations in Europe, which rank 27th in the world for 2022, according to the World Steel Association.
    - deleted 3y ago
      [deleted]
    - Supermancho 3y ago
      >> It doesn't support anything you said > What China could not achieve by Stalinist state planning or Maoist revolutionary enthusiasm, it achieved by letting a million private-sector smelters bloom. Good luck with whatever.
- bombcar 3y ago
  The glaring issue I see is that if "integrated" mills start shutting down, where will the old steel scrap for the mini-mills eventually come from? Someone somewhere has to be making new steel.
  - bushbaba 3y ago
    Or if demand for steel increases
  - piuantiderp 3y ago
    Don't worry middle-class and below in the future will: not be able to buy cars, not able to use fossil fuel in any way, very limited in what steel products they can buy.
  - aziaziazi 3y ago
    From a quick search, China have some integrated Mills. This one is operated in Taiwan: https://en.m.wikipedia.org/wiki/China_Steel https://en.m.wikipedia.org/wiki/China_Steel
  - gourabmi 3y ago
    Short Answer : New steel is coming from overseas. I think regions / steel industries in the region go through phases. I can draw upon my experience with one of the biggest steel manufacturers in India and Europe. SE Asia is going through a phase where most of the steel consumption is met by primary steel, new steel made from blast furnaces consuming iron ore. A lot of that steel is exported but there is a very big domestic market. The need for secondary steel (made from old steel scraps) will become important in the future for SE Asia. Back in the US, this is already the case. Primary and Secondary steel have different properties. Secondary steel can not be used for some applications, they can only use Primary. Vice versa, using primary steel for some applications might not be economically feasible for some applications.
  - dr-detroit 3y ago
    [dead]
  - transcriptase 3y ago
- RetpolineDrama 3y ago
  >So the question is... did unions prevent a path to upgradation to new tech? Of course they did. It's even worse in legacy auto, Engineering has to get approval from the union for any significant new vehicle features.
  - hef19898 3y ago
    That is some realy bold claim, any sources for that?
  - tehjoker 3y ago
    probably bc there are safety and other concerns that need to be addressed? management gets to check that off why not the people building it?
    - AlbertCory 3y ago
      " other concerns " doing a lot of work there. What other concerns? Is "how many people get employed, and at what salaries" one of them?
- hef19898 3y ago
  Isn't that one of the case studies in the Innovator's Dilema? I don't remember any mention of unions in that.
- scythe 3y ago
  It's not exactly unheard of. One feature that makes unions in the United States different from other countries is that they tend to have a more adversarial relationship with employers and the government. Sectoral bargaining is very rare, if it exists at all. Union laws are a patchwork of left- and right-wing administrations' attempts to undermine each other. American culture, in particular the prominence of Manichaean narratives, may play a role in making different groups see each other as "evil" and willing to do underhanded things, whether it's the UFCW planting an ABC news story about Food Lion or Amazon ignoring labor laws to fire unionizing workers. The teacher's union and police union serve as bogeymen for one or the other political party. Advocating compromise is often met with scorn.
  - hef19898 3y ago
    And none of what you said has anything to do with US Steel, so your point is?
- hammock 3y ago
  Not unions solely, but as other commenters have pointed out, the cost of labor more generally is what did it. And the comparative cost of labor in e.g. China vs. US is driven by the balance of trade. Expensive labor is the price the US pays to run a trade deficit
- analog31 3y ago
  The question is... who's going to smelt iron ore? In fact I think it was the head of US Steel, who put it succinctly several years ago: Somebody has to turn iron ore into iron.
  - ethbr1 3y ago
    A huge amount of global iron ore comes from Australia. [0,1] And globally in descending reserves order: Australia, Brazil, Russia. China's extraction:reserves ratio is much higher and will exhaust reserves much quicker than the others. So it'd make more sense to smelt it close, given the volume/weight ratio of ore to refined material. Transport by sea... but that's still A LOT of tonnage to move ore. [0] https://www.statista.com/statistics/267381/world-reserves-of-iron-ore-by-country/ https://www.statista.com/statistics/267381/world-reserves-of... [1] https://en.m.wikipedia.org/wiki/List_of_countries_by_iron_ore_production https://en.m.wikipedia.org/wiki/List_of_countries_by_iron_or...
- pauljonas 3y ago
  It's been a few decades but I worked for USS as a developer, after attaining a computer science degree. I know it's a tired old adage that labor / labor unions was the reason for American steel manufacturing decline and rise of Japanese dominance. But from the inside, that simply wasn't so -- it was more a case that Japanese mills not only more modern but the entire manufacturing process, from casting to finished product, was more efficient. Even when new US mills gained new technology, it wasn't thought through and decisions seemed to be made the basis of old boy network than solid business acumen.
  - chaostheory 3y ago
    But weren’t the unions also against changing the process?
    - pauljonas 3y ago
      No. These factors that I'm speaking of were more along the lines of: - a slab caster implemented, but there is already a bloom caster and only one crane facility to support both so both ran at less than optimal throughput. - choosing to prioritize far less profitable slab casting for output to a joint venture plant in CA than very profitable bloom casting (& union definitely not in favor of this) - buying coke at 10X price they could get elsewhere because old buddy favoritism Basically, the Japanese firms were built a much more holistic basis -- JIT engineering, so that liquid is pored, slabs created and were delivered right into finished product processing. Whereas, by contrast, in the mill I worked at, slabs would be cast, then would cool in a yard, heated & slitted, then heated again for strip mill processing (it cost quite a bit of energy to heat to 2200/2300 degrees). I mean, my boss & I would even spitball on how much better the place would run if it was bought out and run by (at that time, late 80s / early 90s) a foreign competitor that made decisions on business sense rather than old boy political network machinations. Basically, all about: MANAGEMENT, MANAGEMENT, MANAGEMENT.
- bsder 3y ago
  > So the question is... did unions prevent a path to upgradation to new tech? Not really? The difference is referred to as "primary" vs "secondary" steelmaking. The US pumped out enormous quantities of steel from 1910-1980ish and then usage decreased as better computer models as well as plastics allowed a lot more efficient use of the material. This meant that a bunch of used steel was available and nobody could really consume steel fast anymore. Consequently, "secondary" small mills recycling used steel were WAY more profitable than "primary" large mills making it from ore. This devastated the US steel industry which was mostly "primary" (some of that has changed). Then ... China ... started consuming vast quantities of steel for development. At some point, China bought up and used most of the used steel that was available. So ... today ... "secondary" steel is rising because the cheap used steel isn't laying around anymore. "Primary" steel is making a comeback as you need to produce original feedstock or the "secondary" producers have nothing to work with. The correct answer to all this is: it's a balance. You need some primary steelmaking or you simply run out of feedstock. You need some secondary steelmaking to tweak the type of steel and provide smaller, specialty runs.
JKCalhoun 3y ago
Finger pointing aside, this does seem like a sad outcome for the U.S.
lokar 3y ago
Honest question: are Japanese industrial workers (steel, auto, etc) significantly worse off (pay, conditions, security, etc) vs Americans? I sort of assume that at this point they are an advanced economy and there would be roughly parity.
- jessriedel 3y ago
  Wages are lower in Japan, so I'm pretty sure the Japanese workers are paid less. Working conditions and job security are probably the same or better.
  - zbyte64 3y ago
    Job security is way better, work conditions are debateable because of a "work till you die" work culture.
    - lokar 3y ago
      Meaning no retirement?
- ska 3y ago
  > roughly parity. There is quite a bit of variability in these things among say G7 or G20 countries. Americans on the whole typically have higher net, higher volatility, lower security, for example. It gets complicated when you try and do "whole picture" comparisons (e.g. how to factor in state pensions/health care/etc.) but the dominance of the US economy worldwide and $ function as a reserve pays a very real divided to nearly everyone.
Der_Einzige 3y ago
This btw is why Japanese cars are better than American cars. It's objectively better to work in a unionized environment. Let's you be "lazier" and get away with half-asserey - great from the worker perspective but from the perspective of a prospective buyer, ideally your product is produced by people who work as hard as possible. The Japanese have a work-hard without half-assing attitude. This is why Toyota/Lexus have consistency the best build quality, stitching, etc in their cars. Their employees are mostly not unionized and not even paid particularly better than the American ones - but the Japanese work ethic is preserved. This is also why "made in japan" toyota/lexus is prefereed to made in america/canada toyota/lexus.
- hef19898 3y ago
  The only thing correct in your statement is the spelling of Toyota and Lexus, and even that you only nailed one out of three times (brand names start with capitals, even in English).
  - Der_Einzige 3y ago
    Maybe you could stop being lazy and explain specifically why what I claimed was wrong. But you can't, because you're wrong and you know it.
    - hef19898 3y ago
      Car build quality has nothing to do with unions for example, and that unions allow workers to be lazy is such wrong statememt, I din't even know where to start. US car makers were always bad when it came to quality, unions or not since Tesla is no difference. Build quality doesn't come from "working ad hard as possible", in general quality is indorectly proportional to the amount of hustling people do, voluntary or othetwise. Build quality in anything assembeld comes from proper engineering, proper assembly procedures, properly trained staff, solid quality culture (guess where the Japanese traditionally excel) and a quality focused organisation. None of those have anything to do with unions, half-assery or anything else you brought up.
- 3y ago
gunapologist99 3y ago
> We remained open throughout this process to working with U.S. Steel to keep this iconic American company domestically owned and operated, but instead it chose to push aside the concerns of its dedicated workforce and sell to a foreign-owned company ... for more than twice as much! He kinda left the part out.
- tshirthoodie 3y ago
  >He kinda left the part out. It's irrelevant because the workers won't see a penny of any of it. You kinda left that part out.
  - gunapologist99 3y ago
    Why would that matter to the workers? They'll still get the same exorbitant salary that they negotiated. They could have invested in their employer just like anyone else.
    - nobodyandproud 3y ago
      What is the amount of exorbitant salary?
deleted 3y ago
[deleted]

eunos 3y ago

After being coddled up by the govt for so many years (NatSec tariffs, tax breaks, bailouts, import restrictions, etc), ultimately it still failed.

FredPret 3y ago
US Steel hasn't failed, it's been pumping out money for a long time. $1.6B in profit in the last 4Q's on a market cap of $9B. It's far from dead - leverage is only 45%; they've got $11B in equity in the company. [https://valustox.com/X https://valustox.com/X]
- kranke155 3y ago
  One more misinformed HN top comment.
  - wmeredith 3y ago
    Please illuminate us. How is this misinformed?
    - hef19898 3y ago
      A profitable company is hardly a failure. Or maybe it is, after all HN is more into VC-miney-burning-to-buy-wannabe-monopoly "tech" start-ups.
    - kranke155 3y ago
      Top comment said the company was a failure. Doesn´t seem to be the case, since the company was clearly profitable.
      - verdverm 3y ago
        Shrinking and laying off workers is rarely seen as successful. You can play games and look/stay profitable all the while the real story is far from it. Success is typically seen as something that is improving, whether profit or market share. Shrinking while still remaining profitable sits in a more gray zone. I think most don't see this as successful, but I wouldn't call it a complete failure either, unless you consider selling a local company to a foreign company a failure.

Pxtl 3y ago

FFS, they bought up and ruined Stelco here in Hamilton (Canada's Pittsburgh) just to loot its customer-list and they still failed anyways?

jeffbee 3y ago
They bought bits and pieces of Stelco out of bankruptcy. It seems as if it was pre-ruined before USS owned it.

astrea 3y ago

This will be another huge hit to what I call “Old Pittsburgh”. It’s still very much a steel city, especially in the South Hills. Interested to see that how it impacts the local economy.

coffeeshopgoth 3y ago
As someone from the South Hills area, I, too, am interested in seeing how this goes...Pittsburgh has really changed over the past 30-40 years, replacing a massively overwhelming population of blue collar jobs with white collar (mostly doctors and lawyers). I know a lot of folk who work at/have worked at U.S. Steel and hope the transition works out for them.
was8309 3y ago
by south hills, guessing you mean the Mon Valley?
- sjs382 3y ago
  South Hills is the southern suburbs. Bethel Park, South Park, Dormont, Castle Shannon, Mt Lebanon, etc.

nowbabynow 3y ago

[dead]

topkai22 3y ago

The insane conspiracy theorist in me immediately started thinking Elon Musk is behind this so he can get the ticket symbol (US steel is X on the NYSE.)

dllthomas 3y ago
I've been making the same joke. I also laughed a lot when some article described someone (Fetterman?) commenting "in a post on X"
arduanika 3y ago
Would be quite the steel.

codexb 3y ago

Didn't the US government stop this exact same thing from happening 20 years ago over national security concerns?

h2odragon 3y ago
an easy response is "Our government no longer believes steel is critical to our national security" Cant find mention of US steel being sold, perhaps this? > In 1984, the federal government prevented U.S. Steel from acquiring National Steel, and political pressure from the United States Congress, as well as the United Steelworkers (USW), forced the company to abandon plans to import British Steel Corporation slabs https://en.wikipedia.org/wiki/U.S._Steel https://en.wikipedia.org/wiki/U.S._Steel
- vasco 3y ago
  The country that will acquire is also important in this equation. Russians were blocked from buying Oregon steel for example. Japan is more like a protectorate of the US than a fully independent country post WW2, with specific articles of the constitution that block army sizes, specific military equipment, agreements for maintenance of permanent US bases and troops in the country etc. Even when recently they decided to re-interpret these articles this was done only with the express permission of the US.
  - xp84 3y ago
    True that there is no more loyal ally than Japan aside from perhaps Canada. Kind of miraculous that that happened, honestly, considering that the phase of our relationship immediately before this was "fighting to the death" followed by "atomic bomb dropping" -- but I'm grateful that somehow it has come to be an enduring friendship both politically and really culturally as well.
    - vasco 3y ago
      I mean, the US did a huge occupation and education campaign which depending on how you categorize "force someone to keep your army within their borders" could even be seen as them not actually being sovereign. People are fast to forget that part the same way they forget Poland was only liberated truly in 1989, it's not such a good story when you include those parts.

eej71 3y ago

For a fascinating read about Nucor, the competitor that surpassed US Steel, I'd recommend Richard Preston's American Steel.

ProllyInfamous 3y ago
tl;dr: US didn't update to "modern" induction furnaces until 2020, decades after most of global foundries did so. Failure to innovate == failure.

pandemicsyn 3y ago

This will be interesting. I wonder what will happen to Dr Larrin Thomas (https://knifesteelnerds.com/about-me/ https://knifesteelnerds.com/about-me/) he's been able to bring some new knife steels to market while working for US Steel by day. Wonder if Nippon allows side gigs.

hef19898 3y ago
I do have a bar of 40-layered high-carbon steel from Nippon Steel and another one of white-paper-and-low-carbon-steel with a iron (!) core from Hitachi in the basement waiting to be forged into swords. So, going from that, I think the Japanese (!) management should be fine, the local US management might different so. Thanks for the link, some great resources on that site!
- riversflow 3y ago
  If you are new to knifesteelnerds, but not steel in general, and like blades, don’t just check out the site, make a beeline to read about Magnacut. Super cool and exciting.

syntaxing 3y ago

They didn’t inform the Union about it nor get its approval. I highly doubt the government will allow this deal to go through.

incognition 3y ago
Are you a lawyer? merger Arbitrage

nickpinkston 3y ago

I'm interested in how the United Steelworkers thinks about the generally better track record of Japanese companies with labor relations vs. American management. This makes it seem like it was purely an "American First" kind of sentiment, whereas I could imagine this being better for the workers themselves. This then makes me wonder if the Steelworkers is more company union (ie their leaders are bought off / cushy with management with lots of perks) or if this was put to the vote by the general union membership, etc.

Macha 3y ago
I don't think that applies as much to line workers in the overseas subsidiaries of Japanese companies as it does in the central company. Like, Square Enix's former European divisions, Sony of America, all run much more like companies in their home countries than like their parent company.
- nickpinkston 3y ago
  I believe Toyota @ NUMMI actually showed that they could win over the union and get everyone bought into their lean culture, but it took time / patience. Notably, this plant was considered a failure before because the of the antagonism between labor/mgmt led to really toxic behavior. GM blamed the union labor, but Toyota ended up firing the managers and got buy in from labor because of their long-term / labor-centric culture, including more empowerment, respect, high quality training, etc. https://www.lean.org/the-lean-post/articles/how-nummi-changed-its-culture/ https://www.lean.org/the-lean-post/articles/how-nummi-change...
  - AlbertCory 3y ago
    And yet NUMMI failed. https://www.popularmechanics.com/cars/a5514/4350856/ https://www.popularmechanics.com/cars/a5514/4350856/ Then the building became Solyndra, which also failed. GM, of course, is one of the stupidest companies on Earth, so they'd have trouble selling free beer to college football fans. If you want to blame them you won't get any argument from me.

megaman821 3y ago

There is a 25% tariff on steel imports and American steel companies are still failing. What did the tariffs do other than raise prices of steel for Americans?

christophilus 3y ago
Nucor looks like it's doing OK.
tw04 3y ago
One American steel company is "failing". And by "failing" you mean still producing billions in profit every year, leadership just decided they wanted to cash out. https://www.google.com/finance/quote/X:NYSE https://www.google.com/finance/quote/X:NYSE

RecycledEle 3y ago

[flagged]

NoMoreNicksLeft 3y ago
> We were ignored, slandered, and our votes were never counted. Literally, the State of Texas does not count votes in Presidential Elections for "third parties." You understand that's by design, right? In most states (likely all, but I can't be bothered to check if there's an exception), a candidate has to register as a "write-in candidate" or votes writing in their names won't be counted at all. Ostensibly, this was done when people were actually writing on paper, and it might be impossible to count 100,000 unique write-in names if 100,000 voters voted for unique names. Now, in the digital/electronic voting machines where there would never need to be separate first class candidates and second class "write-in" candidates, the system is preserved for whatever reason.
- RecycledEle 3y ago
  I mean there are 4 people on the ballot for POTUS, or you can request a write-in ballot. If you vote for anyone outside the D/R establishment, they reject your ballot.
  - dragonwriter 3y ago
    > I mean there are 4 people on the ballot for POTUS, or you can request a write-in ballot. If you vote for anyone outside the D/R establishment, they reject your ballot. Two of the four parties on the ballot are “outside the D/R establishment” (the four parties being the Democrats, Republicans, Libertarians, and Greens.) Additionally, its possible for other parties to qualify for ballot access, neither the number nor the identity of the qualified parties is fixed.
achandlerwhite 3y ago
No blame for the corporations outsourcing jobs and suppliers to save a few bucks for their executives and investors?

happytiger 3y ago

This is very bad for America. We need to keep some degree of industrial steel capacity capabilities in house. For perspective, the vast majority of global steel capacity is in China, which made over half of global steel output in 2020 (its almost a trillion dollar market), while the United States accounted for approximately 4%. I mean Nippon is a great company, but this is a critical piece of infrastructure at a time when things aren’t going exactly perfectly in the world.

pjscott 3y ago
How in-house does it need to be? The actual physical facilities aren't being shut down; they're just under new ownership and management. And Nippon Steel is located in Japan, which is such a dependable ally of the US that I'm politely trying not to use the phrase "vassal state." Also in the US, we've got Steel Dynamics (producing 75% as much as US Steel), Cleveland-Cliffs (approximately tied with US Steel), and Nucor (about 157% as much). That's not the whole story, of course -- Nucor primarily recycles scrap steel, for example, as opposed to smelting ore -- but I'm not really seeing a crisis anywhere on the horizon here. (My opinion in this paragraph is less confident than the first, so I'm open to correction from someone who knows more about the steel industry.)
- TedDoesntTalk 3y ago
  US Steel was a major contributor of steel for the WWII military machine. Honest question: if WW3 were to start, would we be able to appropriate Nippon-owned USS factories for wartime use?
  - klooney 3y ago
    Yes- everything on US soil is uh, vulnerable to the national guard showing up with tanks and giving orders.
  - happytiger 3y ago
    So, this is an interesting question and one which I watched unfold in COVID times. The law that would specifically come into play here is called the Defense Production Act, and it’s complicated. Here’s a great overview: https://www.cfr.org/in-brief/what-defense-production-act https://www.cfr.org/in-brief/what-defense-production-act For more specifics, I would look at this overview which is excellent: https://www.businessdefense.gov/ibr/mceip/dpai/dpat3/docs/DPA-TitleIII-Overview.pdf https://www.businessdefense.gov/ibr/mceip/dpai/dpat3/docs/DP... In wartime, seizing capacity from an ally is… problematic. That’s my concern. What is technically possible isn’t necessarily diplomatically viable, and there are quite a few layers of laws here.

Hadriel 3y ago

Isn't it really ironic the names of these corps

pinewurst 3y ago

Compare the $14B cost of USS with the $44B paid (stupidly) for Twitter

FirmwareBurner 3y ago
You can't push ads on steel.
- hef19898 3y ago
  Not yet.
  - fomine3 3y ago
    Great idea

pjmlp 3y ago

I guess steel isn't considered a critical asset for US industry to be in foreign hands.

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WhereIsTheTruth 3y ago
My theory is they want to use Japan do R&D to green-wash their steel industry and to absorb all of the related costs, they'll then get it back with bunch of new IPs as a result, Japan is.. hum.. kind https://www.wsj.com/articles/green-steel-is-coming-europe-is-leading-the-charge-thanks-to-new-carbon-taxes-886c77b6 https://www.wsj.com/articles/green-steel-is-coming-europe-is... China also doing its moves to lead

araes 3y ago

Other supplementary info: Steel Ind. Summary, 2021: https://www.trade.gov/sites/default/files/2021-03/exec%20sum-March%202021.pdf https://www.trade.gov/sites/default/files/2021-03/exec%20sum... World Steel Production, Last 50 Years: https://elements.visualcapitalist.com/50-years-of-global-steel-production/ https://elements.visualcapitalist.com/50-years-of-global-ste... Steel Crisis and Aftermath: https://en.wikipedia.org/wiki/Steel_crisis https://en.wikipedia.org/wiki/Steel_crisis World Steel Production since 1800's: https://www.researchgate.net/publication/343071585/figure/fig1/AS:916467897860097@1595514382257/World-steel-production-historical-data-from-3.png https://www.researchgate.net/publication/343071585/figure/fi... How Steel Production Trends with GDP: https://upload.wikimedia.org/wikipedia/commons/thumb/a/a2/Steel_production_and_GPD_per_capita.svg/1920px-Steel_production_and_GPD_per_capita.svg.png https://upload.wikimedia.org/wikipedia/commons/thumb/a/a2/St... Current Numbers, 2023: https://worldsteel.org/steel-topics/statistics/steel-data-viewer/ https://worldsteel.org/steel-topics/statistics/steel-data-vi... Above, Charted Geographically: https://worldsteel.org/steel-topics/statistics/annual-production-steel-data/?ind=P1_crude_steel_total_pub/CHN/IND https://worldsteel.org/steel-topics/statistics/annual-produc...

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Apocryphon 3y ago

The '80s are back!

georgedegennaro 3y ago

Why is jingoism normalized when it is in defense of labor?

returnofzyx 3y ago

We're bigger than US Steel. First sentence that raced to my mind when I saw this. Hyman Roth; legend.

arduanika 3y ago

Will the NYSE ticker 'X' become free now? Paging Elon Musk...

zackmorris 3y ago

Kind of ironic to be arguing about capitalism vs socialism while a foreign company buys the means of production out from under us. This was all predicted by academics in the late 70s and early 80s. Reagan's trickle-down economics was designed to halt wage increases so that capitalists could collect worker productivity and control the money supply. Then invest those capital gains in regulatory capture to install right wing cronies to carry out the amoral aims of corporations to remove all labor and environmental protections to maximize profit. Allowing the national debt (currently $30+ trillion) to be run up above GDP, making it easier to sell the public on selling off public lands and other resources from the commons to pay it off. Eventually undermining democracy enough to form a constitutional convention to restructure the federal government as a patriarchal society like the Republic of Gilead in The Handmaid's Tale, at the top of a New World Order controlled by wealthy financiers. The sale of US Steel to Nippon Steel should probably have been stopped due to national security concerns. It's especially troublesome that it happened on Biden's watch. But that's how all of this works. In post-New Deal politics, the economy gets targeted during democratic administrations to undermine it enough that people vote for republicans. Then republican administrations run up the debt further to roll out more of their programs while nobody is looking. The worse things get, the more the public votes against its own self-interest. Rinse, repeat. The public never catches its breath long enough to figure it out, so we're still caught in this dysfunction in 2023. I only mention this because I believe that this endgame transcends politics, in the way that pushing a Monopoly board off the table transcends the game itself. We're at a point now where the democratic party as it was once known probably no longer exists, and can be thought of as the 1980s republican party, favorable to corporations, gentrification, tax cuts for the wealthy, neoliberalism, colonialism, exploitation, etc. The republican party today works more like a line of succession, where the vice president is the man behind the curtain, and each level below contains leaks through PR and ownership of the mass media to keep the public in the dark while it's being fleeced. So democrats are in the business of losing while republicans are in the business of winning, while both sell out to the highest bidder. With the Boomers retiring and Gen X not wanting to pursue revisionist history fever dreams, Millennials and Gen Z are in a unique position to stop what seems inevitable now. I could see a return to middle class strengthening, sort of an Atlas Shrugged but from a government captured by capitalism: https://time.com/6343967/bidenomics-is-real-economics/ https://time.com/6343967/bidenomics-is-real-economics/ A plainspoken take on the dysfunction: https://www.tiktok.com/@watchfulcoyote/video/7311503851977215274 https://www.tiktok.com/@watchfulcoyote/video/731150385197721...

LanzVonL 3y ago

We should have sold it to China instead.