Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
“This is yet another example of hardworking Americans being blindsided by greedy corporations willing to sell out their communities to serve their shareholders. I stand with the men and women of the Steelworkers and their union way of life ….”
Please. How does Fetterman think it works these days ?? What does he think should happen? How should it go? Gov intervention? I thought Fetterman was not dim.
My maternal grandfather was an svp for decades for the Ohio Steel Foundry, absorbed if that’s the word at the end of his career into US Steel or a predecessor. So it went and so it goes. Can be terrible. I await the senator's proposals.
Well, there are a LOT more articles out there about the proposed sale. Had you read them, you might have had an idea why Fetterman said what he said, and you might not have criticized him.
David McCall, the president, called the deal “greedy” and a “violation” of a union agreement that requires any buyer of US Steel to agree to a new labor agreement prior to any sale.
“Neither US Steel nor Nippon reached out to our union regarding the deal, which is in itself a violation of our partnership agreement that requires US Steel to notify us of a change in control or business conditions,” McCall told Axios, calling the sale “shortsighted”.
A previous buyout offer in August, worth $7.3bn, by rival company Cleveland Cliffs, was rejected by US Steel. That offer did have the support of the USW union, which praised the Ohio-based Cleveland Cliffs as being “in the best position to ensure that US-based manufacturing remains strong in this country”, and noted it didn’t cut jobs during previous acquisitions in 2019 and 2020.
There are multiple bids for X. USW had sided with CLF bid but that may now be a low bid. USW claims that it has a veto on the acquisition of X, but X says it doesn't. Unless CLF doubles its offer to match Japanese Nippon Steel, this may become an interesting legal tussle; from the news, CLF has given up on its bid. Nippon Steel does have US plants in AL and IN; its regional HQ is in Houston, TX.
Oh, I did read several, as thin as this one you cite, and can't find any reasoning which would change what I wrote. I was just wondering why Fetterman put it as he did, as he is not naive. The natsec argument is the one always made, rightly or wrongly. I hope the union clause has some impact, but doubt it.
I have a hard time understanding the rationale to pay double for a commodity producer. If companies granted all workers stock options, then the USW would be excited for someone to overpay!
CLF and private-equity were playing the game of buy-X-on-cheap. Union won't do good under private-equity, so USW sided with CLF. That game has changed now that Nippon Steel bid almost double - sort of a knock out bid to make others go away and also hope for a favorable regulatory ruling despite it being a foreign takeover. Lobbyists for X and Nippon Steel should soon be out in force in DC. Nippon Steel has already said that it will honor all existing union contracts. The USW head may also get over his hurt feelings that nobody contacted him ahead - but keep in mind that he had prematurely aligned himself with CLF that has now walked away.
X has iconic history and brand name, and may be Nippon Steel sees a way to globally capitalize on that. If Nippon Steel fails in its bid, another white knight may emerge.
I will ask family who live and worked in this area of trade academe their take
Amazing outcome over 80 years.
Art Buchwald 50y ago used to write wit columns and Tom Lehrer sang his songs about how Vietnam should simply study Germany and Japan to see how things go after countries lose to the United States.
"If Nippon Steel fails in its bid, another white knight may emerge."
If Nippon bid fails it would be for inability to get Govt clearance (probably needed in more than one country). I did not think another competing horizontal suitor would be able to get those clearances if Nippon can not and Nippon price was too high for any vertical suitor. At least that was my thinking when I sold X soon after the Nippon bid was announced, leaving 9+% for the arb gods. Now, I just watch the show to see if there is anything new to learn for the next deal.
In the list of US steel producers by tonnes, I see X & CLF as US #2 & #3, or US #3 & #2. Market-cap rankings may be different. This global list has data from 06/2011-06/2022. If Nippon Steel's bid for X is successful, it will move to global #2 spot; China will have global #1, #4, #5, #6 AND other spots. List also shows 10-yr production history, and CLF seems a new kid on the block that grew from acquisitions in the last few years (unless the table has some missing data).
... and, in tonight's yucks dept, plus a mini-lesson on the longterm (and inevitable) advantages of globalization, this from new rightwingnut and fellow buckeye JDV, who woulda grown up with my kids if I had stayed in SW Ohio:
Mr. Vance’s opposition is especially interesting. “Allowing foreign companies to buy out American companies and enjoy our trade protections subverts the very purpose for which those protections were put in place,” Mr. Vance, along with two GOP colleagues, wrote in a letter urging CFIUS to block the sale. In “Hillbilly Elegy,” the 2016 memoir that propelled him to national fame, Mr. Vance recounted the initial negative reaction in Middletown Ohio when another Japanese company, Kawasaki, acquired Armco, which owned the steel mill where his grandfather had worked. It was as though “General Tojo himself had decided to set up shop in southwest Ohio,” Mr. Vance recalled. Then the locals realized new owners could invest in their decaying community. “The Japanese are our friends now,” his grandfather told him. “The Kawasaki merger represented an inconvenient truth: Manufacturing in America was a tough business in the post-globalization world,” Mr. Vance wrote in his book. “If companies like Armco were going to survive, they would have to retool. Kawasaki gave Armco a chance, and Middletown’s flagship company probably would not have survived without it.”
How to get owned by your own smarter wiser grandpa! Tojo! ffs ffs ... what is it with these people?
Comments
“This is yet another example of hardworking Americans being blindsided by greedy corporations willing to sell out their communities to serve their shareholders. I stand with the men and women of the Steelworkers and their union way of life ….”
Please. How does Fetterman think it works these days ?? What does he think should happen? How should it go? Gov intervention?
I thought Fetterman was not dim.
My maternal grandfather was an svp for decades for the Ohio Steel Foundry, absorbed if that’s the word at the end of his career into US Steel or a predecessor. So it went and so it goes. Can be terrible. I await the senator's proposals.
https://www.theguardian.com/us-news/2023/dec/19/john-fetterman-vote-block-us-steel-sale
Excerpt:
David McCall, the president, called the deal “greedy” and a “violation” of a union agreement that requires any buyer of US Steel to agree to a new labor agreement prior to any sale.
“Neither US Steel nor Nippon reached out to our union regarding the deal, which is in itself a violation of our partnership agreement that requires US Steel to notify us of a change in control or business conditions,” McCall told Axios, calling the sale “shortsighted”.
A previous buyout offer in August, worth $7.3bn, by rival company Cleveland Cliffs, was rejected by US Steel. That offer did have the support of the USW union, which praised the Ohio-based Cleveland Cliffs as being “in the best position to ensure that US-based manufacturing remains strong in this country”, and noted it didn’t cut jobs during previous acquisitions in 2019 and 2020.
X has iconic history and brand name, and may be Nippon Steel sees a way to globally capitalize on that. If Nippon Steel fails in its bid, another white knight may emerge.
I figured Cliff was probably not for real.
I will ask family who live and worked in this area of trade academe their take
Amazing outcome over 80 years.
Art Buchwald 50y ago used to write wit columns and Tom Lehrer sang his songs about how Vietnam should simply study Germany and Japan to see how things go after countries lose to the United States.
If Nippon bid fails it would be for inability to get Govt clearance (probably needed in more than one country). I did not think another competing horizontal suitor would be able to get those clearances if Nippon can not and Nippon price was too high for any vertical suitor. At least that was my thinking when I sold X soon after the Nippon bid was announced, leaving 9+% for the arb gods. Now, I just watch the show to see if there is anything new to learn for the next deal.
Wiki, 2011-22 https://en.wikipedia.org/wiki/List_of_steel_producers
World Steel Assoc, 2021-22 https://worldsteel.org/steel-topics/statistics/top-producers/
https://www.washingtonpost.com/opinions/2023/12/22/us-steel-nippon-friendshoring-cfius-japan/
... and, in tonight's yucks dept, plus a mini-lesson on the longterm (and inevitable) advantages of globalization, this from new rightwingnut and fellow buckeye JDV, who woulda grown up with my kids if I had stayed in SW Ohio:
Mr. Vance’s opposition is especially interesting. “Allowing foreign companies to buy out American companies and enjoy our trade protections subverts the very purpose for which those protections were put in place,” Mr. Vance, along with two GOP colleagues, wrote in a letter urging CFIUS to block the sale. In “Hillbilly Elegy,” the 2016 memoir that propelled him to national fame, Mr. Vance recounted the initial negative reaction in Middletown Ohio when another Japanese company, Kawasaki, acquired Armco, which owned the steel mill where his grandfather had worked. It was as though “General Tojo himself had decided to set up shop in southwest Ohio,” Mr. Vance recalled. Then the locals realized new owners could invest in their decaying community. “The Japanese are our friends now,” his grandfather told him.
“The Kawasaki merger represented an inconvenient truth: Manufacturing in America was a tough business in the post-globalization world,” Mr. Vance wrote in his book. “If companies like Armco were going to survive, they would have to retool. Kawasaki gave Armco a chance, and Middletown’s flagship company probably would not have survived without it.”
How to get owned by your own smarter wiser grandpa! Tojo! ffs ffs ... what is it with these people?