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| Biden will decide on US Steel acquisition...................... (Page 1/3) |
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blackrams
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DEC 24, 09:58 AM
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Biden will decide on US Steel acquisition after influential panel fails to reach consensus
https://www.msn.com/en-us/n...d017785a1503a6&ei=93
| quote | WASHINGTON (AP) — A powerful government panel on Monday failed to reach consensus on the possible national security risks of a nearly $15 billion proposed deal for Nippon Steel of Japan to purchase U.S. Steel, leaving the decision to President Joe Biden, who opposes the deal.
The Committee on Foreign Investment in the United States, known as CFIUS, sent its long-awaited report on the merger to Biden, who formally came out against the deal in March. He has 15 days to reach a final decision, the White House said. A U.S. official familiar with the matter, speaking on condition of anonymity to discuss the private report, said some federal agencies represented on the panel were skeptical that allowing a Japanese company to buy an American-owned steelmaker would create national security risks.
Monday was the deadline to approve the deal, recommend that Biden block it or extend the review process.
Both Biden and President-elect Donald Trump have courted unionized workers at U.S. Steel and vowed to block the acquisition amid concerns about foreign ownership of a flagship American company. The economic risk, however, is giving up Nippon Steel's potential investments in the mills and upgrades that might help preserve steel production within the United States.
Under the terms of the proposed $14.9 billion all-cash deal, U.S. Steel would keep its name and its headquarters in Pittsburgh, where it was founded in 1901 by J.P. Morgan and Andrew Carnegie. It would become a subsidiary of Nippon Steel, and the combined company would be among the top three steelmakers in the world, according to 2023 figures from the World Steel Association.0
Biden, backed by the United Steelworkers, said earlier this year that it was "vital for (U.S. Steel) to remain an American steel company that is domestically owned and operated.”
Trump has also opposed the acquisition and vowed earlier this month on his Truth Social platform to “block this deal from happening.” He proposed reviving U.S. Steel's flagging fortunes “through a series of Tax Incentives and Tariffs.”
The steelworkers union questions if Nippon Steel would keep jobs at unionized plants, make good on collectively bargained benefits or protect American steel production from cheap foreign imports.
“Our union has been calling for strict government scrutiny of the sale since it was announced. Now it’s up to President Biden to determine the best path forward,” David McCall, the steelworkers' president, said in a statement Monday. “We continue to believe that means keeping U.S. Steel domestically owned and operated.”
Nippon Steel and U.S. Steel have waged a public relations campaign to win over skeptics.
U.S. Steel said in a statement Monday that the deal “is the best way, by far, to ensure that U.S. Steel, including its employees, communities, and customers, will thrive well into the future.”
Nippon Steel said Tuesday that it had been informed by CFIUS that it had referred the case to Biden, and urged him to “reflect on the great lengths that we have gone to address any national security concerns that have been raised and the significant commitments we have made to grow U. S. Steel, protect American jobs, and strengthen the entire American steel industry, which will enhance American national security.”
“We are confident that our transaction should and will be approved if it is fairly evaluated on its merits,” it said in a statement.
A growing number of conservatives have publicly backed the deal, as Nippon Steel began to win over some steelworkers union members and officials in areas near its blast furnaces in Pennsylvania and Indiana. Many backers said Nippon Steel has a stronger financial balance sheet than rival Cleveland-Cliffs to invest the necessary cash to upgrade aging U.S. Steel blast furnaces.
Nippon Steel pledged to invest $2.7 billion in United Steelworkers-represented facilities, including U.S. Steel’s blast furnaces, and promised not to import steel slabs that would compete with the blast furnaces.
It also pledged to protect U.S. Steel in trade matters and to not lay off employees or close plants during the term of the basic labor agreement. Earlier this month, it offered $5,000 in closing bonuses to U.S. Steel employees, a nearly $100 million expense.
Nippon Steel also said it was best positioned to help American steel compete in an industry dominated by the Chinese.
The proposed sale came during a tide of renewed political support for rebuilding America’s manufacturing sector, a presidential campaign in which Pennsylvania was a prime battleground, and a long stretch of protectionist U.S. tariffs that analysts say has helped reinvigorate domestic steel.
Chaired by Treasury Secretary Janet Yellen, CFIUS screens business deals between U.S. firms and foreign investors and can block sales or force parties to change the terms of an agreement to protect national security.
Congress significantly expanded the committee's powers through the 2018 Foreign Investment Risk Review Modernization Act, known as FIRRMA.
In September, Biden issued an executive order broadening the factors the committee should consider when reviewing deals — such as how they impact the U.S. supply chain or if they put Americans’ personal data at risk.
Nippon Steel has factories in the U.S., Mexico, China and Southeast Asia. It supplies the world’s top automakers, including Toyota Motor Corp., and makes steel for railways, pipes, appliances and skyscrapers. |
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Rarely do I agree with Biden but, this (for me) is mostly about our national security. We already have way too many foreign investors and owners.
Rams
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olejoedad
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DEC 24, 10:40 AM
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The 'powerful panel' wasn't very powerful, was it?
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blackrams
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DEC 24, 11:14 AM
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| quote | Originally posted by olejoedad:
The 'powerful panel' wasn't very powerful, was it? |
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My guess is the forces on both sides of the issue are where the power existed. Neither side willing to do the right thing. Ya know that old saying about Money talks,  walks.
Rams
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NewDustin
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DEC 24, 01:39 PM
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US Steel isn't the largest domestic producer of US steel, and only produces about 20% of our domestic output. It has exclusive contracts and a high level of production for specialized steel for DoD uses, and that would be much more problematic in a foreign acquisition.
I feel like this is a bandaid on a bullet wound, though a politically smart one (whaaaaaat, the Democrats courting the working class??? What is this, the 90s?). Where do we draw the line for "too important to be bought by a foreign company"? Does it extend to the 3rd, 4th, and 5th largest steel producers? What about the 10th? Is it just steel? Do we need protections in place to ensure that the top 200 domestic producers of any industry that our national defense relies on are domestically owned? Just the top 20?
This feels like something that could be solved via supply line. Refuse to hand a contract to any company so large that it becomes an indispensable part of the government. Incentivize a networks of smaller domestic producers so that the loss of one isn't a national security threat. Require domestic ownership on a certain percentage of those contracts that would be necessary to defend ourselves. That seems like a way this could be done without trying to control our economy like we're China.
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blackrams
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DEC 24, 04:02 PM
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| quote | Originally posted by NewDustin:
It has exclusive contracts and a high level of production for specialized steel for DoD uses, and that would be much more problematic in a foreign acquisition.
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Regardless of it size, the quoted sentence above is enough for me to make the decision although I doubt that's why Biden did it.
Our own longtime allies are letting us down. Are they only allies because of the money and security it brings into their countries as it appears in some NATO allies? Giving a foreign entity control of another American corporation only weakens us. We're who we are due to our economic and military strength. We've already lost much of our industrial and agricultural base with more going to foreign entities.
Rams[This message has been edited by blackrams (edited 12-25-2024).]
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cliffw
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DEC 24, 07:30 PM
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| quote | Originally posted by NewDustin:
Is it just steel? |
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Not all steel is equal.
You may not know but my vocation (now retired) was in the oil field drilling oil wells. Including more than being on an oil drilling rig. I also refurbished old iron into modern drilling rigs. I also scrapped out old worthless rigs/iron. It was sheared up with a excavator type shear and sold for scrap. The scrap was loaded on ships and shipped to China. The Chinese melted it down and then diluted it with other metals. Then sold it back to the United States in various products.
Our oil rigs require high tensile strength steel and we never used Chinese steel or iron on anything. It's a safety thing where corners can not be cut.
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NewDustin
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DEC 27, 02:34 PM
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| quote | Originally posted by blackrams:
Regardless of it size, the quoted sentence above is enough for me to make the decision although I doubt that's why Biden did it.
Our own longtime allies are letting us down. Are they only allies because of the money and security it brings into their countries as it appears in some NATO allies? Giving a foreign entity control of another American corporation only weakens us. We're who we are due to our economic and military strength. We've already lost much of our industrial and agricultural base with more going to foreign entities.
Rams
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Wait, so you want the government to prevent ANY US companies from being sold to foreign investors? That's historically been an extremely important vector for US entrepreneurial finance; it's what's driven our economic and (through it) military strength. If you cut out economies of scale and comparative advantage, what are you going to replace it with to keep our growth going?
| quote | Originally posted by cliffw:
Not all steel is equal.
You may not know but my vocation (now retired) was in the oil field drilling oil wells. Including more than being on an oil drilling rig. I also refurbished old iron into modern drilling rigs. I also scrapped out old worthless rigs/iron. It was sheared up with a excavator type shear and sold for scrap. The scrap was loaded on ships and shipped to China. The Chinese melted it down and then diluted it with other metals. Then sold it back to the United States in various products.
Our oil rigs require high tensile strength steel and we never used Chinese steel or iron on anything. It's a safety thing where corners can not be cut. |
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That's RAD! I have so many questions about being on an oil rig. I didn't even know some of them floated until I went down a wikipedia rabbit hole just a few years ago. My only real knowledge about steal quality is from cooking knives.
I know different quality is important, and I'm not questioning that some industries need some domestic supply for national defense.
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cliffw
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DEC 27, 04:41 PM
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| quote | Originally posted by NewDustin:
My only real knowledge about steal quality is from cooking knives. |
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I hope you stole some good ones,  .
I know different quality is important, and I'm not questioning that some industries need some domestic supply for national defense. [/QUOTE]
| quote | Originally posted by NewDustin:
I have so many questions about being on an oil rig. I didn't even know some of them floated until I went down a wikipedia rabbit hole just a few years ago. |
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I cant make this up, because it is true. We have drilled down thousands of feet deep and then drilled sideways. To benefit from the whole oil cavity.
Just when I thought I have seen it all, I would see / learn more. Much like anybody in any vocation.
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blackrams
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DEC 27, 04:58 PM
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| quote | | Wait, so you want the government to prevent ANY US companies from being sold to foreign investors? That's historically been an extremely important vector for US entrepreneurial finance; it's what's driven our economic and (through it) military strength. If you cut out economies of scale and comparative advantage, what are you going to replace it with to keep our growth going? |
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| quote | Originally posted by NewDustin:
I know different quality is important, and I'm not questioning that some industries need some domestic supply for national defense. |
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Interesting answer to Cliff...........
That's precisely where I was going, if it's a national defense contractor then yeah, I've got a problem with foreign investors.
Rams[This message has been edited by blackrams (edited 12-27-2024).]
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blackrams
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DEC 27, 05:00 PM
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Oops, another double click. Sorry about that.
Rams[This message has been edited by blackrams (edited 12-27-2024).]
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