{"id":1461139,"date":"2024-03-07T00:00:00","date_gmt":"2024-03-07T05:00:00","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1461139"},"modified":"2024-03-07T00:00:00","modified_gmt":"2024-03-07T05:00:00","slug":"to-revive-u-s-steel-allow-its-transfer-to-better-hands","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/to-revive-u-s-steel-allow-its-transfer-to-better-hands\/1461139\/","title":{"rendered":"To Revive U.S. Steel, Allow Its Transfer To Better Hands"},"content":{"rendered":"

To Revive U.S. Steel, Allow Its Transfer To Better Hands<\/span><\/p>\n

\n

Authored by James Glassman via RealClear Wire<\/a>,<\/em><\/p>\n

Remember U.S. Steel? <\/strong>It isn\u2019t what it used to be. Founded in 1901 by Andrew Carnegie and J.P. Morgan, the company was the symbol of American industrial power. But\u00a0employment peaked<\/a>\u00a080 years ago at 340,000; it\u2019s now\u00a023,000<\/a><\/strong>. Once the\u00a0largest corporation<\/a>\u00a0of any kind in the world, U.S. Steel now\u00a0ranks 27th<\/a>\u00a0among global steel producers — and dropping. \u201cIt\u2019s done nothing for decades,\u201d\u00a0according to steel industry analyst Charles Bradford<\/a>.\u00a0<\/p>\n

<\/a><\/p>\n

Stagnation in steel is hardly inevitable<\/strong>. In 1969, another American steelmaker, Nucor,\u00a0pioneered<\/a>\u00a0the electric arc mini mill, which recycles scrap metal, but U.S. Steel is still devoted to less efficient blast furnaces that produce\u00a0three times the CO2 emissions<\/a>. Nucor is now the number-one steelmaker in the country by far, its stock rising by a\u00a0factor of 12<\/a>\u00a0in the last two decades.<\/strong><\/p>\n

The obvious solution to U.S. Steel\u2019s problem was to find a deep-pocketed purchaser — and that\u2019s what it did. The company in December\u00a0accepted an offer<\/a>\u00a0by Nippon Steel Corp.<\/strong>, the world\u2019s fourth-largest steel producer. Nippon agreed to pay $14.9 billion for the company, a surprisingly large all-cash sum \u2013\u00a0a 142% premium<\/a>\u00a0to the price of the stock on Aug. 11. That\u2019s when Cleveland-Cliffs, a blast-furnace producer about the same size as U.S. Steel, made the original attempt to buy the company.<\/strong> In the end, Nippon outbid Cleveland-Cliffs, which wanted to pay with cash plus shares of a stock that\u2019s been lackluster.\u00a0\u00a0<\/p>\n

U.S. Steel also worried that a combination of the second- and third-largest American steelmakers would draw opposition from aggressive Biden antitrust regulators. Still, despite its defeat, Cleveland-Cliffs mobilized legislators to try to kill the Nippon acquisition. Pennsylvania Democratic\u00a0Sen. John Fetterman called<\/a>\u00a0the purchase \u201cabsolutely outrageous.\u201d\u00a0Donald Trump is also opposed<\/a>: \u201cI think it\u2019s a horrible thing.\u201d\u00a0<\/strong><\/p>\n

Customers gathered recently at the Tampa Steel Conference disagree. Along with most U.S. Steel workers, they\u00a0are thrilled<\/a>\u00a0with the deal. The head of the\u00a0United Steelworkers of America<\/a>\u00a0called the sale \u201cshortsighted,\u201d but the union is probably just trying to gain negotiating leverage. Actual U.S. Steel employees were more worried about their company continuing to wither away and about potential layoffs with a Cleveland-Cliffs acquisition.<\/p>\n

Sure, we can shed a brief tear over a Japanese company buying an American icon, but what U.S. Steel needs is not nostalgia but capital and up-to-date technology.\u00a0 Nippon has a shot at providing both and thus reviving an American icon.<\/p>\n

U.S. Steel is not alone in its distress<\/strong>. Much of the American steel industry is fragmented and starved for investment. A wave of buyouts and consolidations is the sector\u2019s best hope.\u00a0\u201cWe don\u2019t need one or two deals,\u201d\u00a0said Waldo Best, an industry analyst with Morgan Stanley Dean Witter & Co. \u201cWe need 10 or 20.\u201d<\/p>\n

If a foreign company offers a route to success that will benefit American investors, consumers and workers, is there really a problem? Sen. J.D. Vance (R-Ohio) seems to think so. He\u00a0argues<\/a>\u00a0that \u201cthe foreign ownership of assets of such national importance could jeopardize our security.\u201d But \u201cforeign\u201d in this case refers to Japan. As the\u00a0State Department puts it<\/a>,\u00a0\u201cThe\u00a0U.S.-Japan Alliance is the cornerstone of U.S. security interests in Asia and is fundamental to regional stability and prosperity.<\/strong>\u201d<\/p>\n

Japan is a bulwark against the real foreign threat to the U.S. economy and security, which is China.\u00a0The House Select Committee on the Chinese Community Party in December\u00a0recommended<\/a>\u00a0that Japan be added to the\u00a0\u201cwhite list\u201d<\/a>\u00a0of foreign states \u2013 now just the U.K., Canada, New Zealand, and Australia \u2013 that are exempt from\u00a0various requirements<\/a>\u00a0of CFIUS, the Committee on Foreign Investment in the United States, which must approve deals with a possible effect on national security.<\/p>\n

China produces<\/a>\u00a0more than 10 times as much steel as the United States<\/strong>, and eight Chinese companies rank among the world\u2019s top dozen steel producers. If we\u2019re really worried about steel for national security reasons, we should be enhancing the position of our closest allies like Japan and welcoming them when they want to put billions into U.S. manufacturing.<\/p>\n

The best antidote to the Chinese challenge \u2013 and the best chance of reviving an American icon — is not to block investment but to encourage it.<\/strong> And the higher the price someone is willing to pay for U.S. assets, the better.<\/p>\n

James K. Glassman, formerly a senior fellow in economics and technology at the American Enterprise Institute, served as Under Secretary of State for Public Diplomacy and Public Affairs and as a member of the SEC\u2019s Investor Advisory Committee.<\/em><\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nWed, 03\/06\/2024 – 19:00<\/span><\/p>\n

\u200bhttps:\/\/www.zerohedge.com\/commodities\/revive-us-steel-allow-its-transfer-better-hands<\/a>\u00a0<\/p>\n

\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

To Revive U.S. Steel, Allow Its Transfer To Better Hands Authored by James Glassman via RealClear Wire, Remember U.S. Steel? It isn\u2019t what it used…<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1461139","post","type-post","status-publish","format-standard","hentry","category-news","wpcat-1-id"],"_links":{"self":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1461139","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/comments?post=1461139"}],"version-history":[{"count":0,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1461139\/revisions"}],"wp:attachment":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media?parent=1461139"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/categories?post=1461139"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/tags?post=1461139"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}