US Steel, once the largest corporation, agrees to sell to Nippon Steel
cnn.com
cnn.com
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.
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-change...
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.
I generally think USS/GM are kinda beyond saving, but even incremental change could be good, and I think Toyota still knows how to run a car plant better than GM.
Note that Toyota did not take over GM. That might have actually worked, albeit being politically unacceptable.
And once you decide yes, let's move production to Kentucky or whatever, so our employees' rent will be $1000 instead of $2500, that's not going to be a union shop.
None of this means that NUMMI failed or even that Toyota hates unions. I think all this would have gone roughly the same even if NUMMI had become a non-union shop under Toyota.
Your argument about the Bay Area falls apart when we consider the Saturn plant in Tennessee.
https://www.popularmechanics.com/cars/a4536/4332298/
https://knowledge.wharton.upenn.edu/article/saturn-a-wealth-...
I keep asking myself how is GM so stupid.
NUMMI produced some really good cars under the Saturn brand. GM messed up in this collaboration. GM quitting Saturn is a story in itself.
The underperformance of labor/mgmt relations in the US vs. EU is a big problem for the US, as there are many chokepoint industries (railroads, ports, etc.) that are going to remain union controlled, and this sour relationship does the US economy / productivity no favors.
Even from a purely capitalist perspective, we have the wrong setup for the long-term economic growth - not including any of the labor benefits that unions can provide.
As an example, all Japanese automakers that start factories in the US start them in anti-union states and take a very hostile anti-union stance. This is in contrast with the very pro union stance these companies take in Japan. But Japanese workers do not strike in solidarity with american workers. They consider america a completely different issue.
Thus, it is guaranteed that as Nippon takes over US steel, they will be as hostile to unions as the laws will allow them, regardless of what their policies in Japan are.
They also chose to open their RAV-4 production facility in Alabama vs. Ontario, despite the fact that the literacy levels of Alabamians was lower to the extent that production documentation had to be converted to pictures, adding delays.
Paying illiterates $17/hr is cheaper than paying union workers $28.
This makes sense since Trump has aligned himself with the unions, transforming the still socially conservative Republican Party into an organization with an economically liberal agenda. This is probably why the Biden administration is mirroring the Trump administration’s policies
The Resident Advisors in my dorm were required to be members of and pay union due to the United AutoWorkers of America. The list of industries which the United Steel Workers represents is likewise ... large. When you have a union which is decoupled from the business sector it represents, then you run the severe risk that the union does not act in it's members (for that industry) interests.
The RAs in my dorm had to pay $200/mo in union dues, if you opted out of the union - you had to pay $400/mo.
Unions are good in theory, but in practice I'm not so sure.
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.
I've heard Japanese steel is pretty great, or at least a common sentiment
Aluminum, copper and steel. Something to think about next time you get anywhere near a car, train, airplane, skyscraper, or bridge.
https://money.cnn.com/2017/10/16/news/companies/kobe-steel-s...
Is a scandal at one company evidence for the entire industry in a country?
Is there similar information about other Japanese companies? What about the industry at large? The prevailing sentiment is that Chinese steel has similar issues.
They were probably being compelled to do that because of the vast amounts of fraud committed by Chinese Aluminum producers. The purity issue was so bad my anodizing shop started recommending our customers demand mil certs from a reputable manufacturer, like Alcoa or Kaiser, and then specifically clarifying to the extruder that they intended to anodize it; being a chemical process anodizing is very dependent on the metal’s makeup and the extruder knows this.
[1] https://www.reuters.com/article/us-usa-china-fraud-idUSKCN1U...
But steel is just steel. You make it and then you sell it. If you make money, great. That is what US Steel does. They make steel, they sell it at a profit. I call that a win.
There are many folks who are long-term-value oriented who would much rather own a healthy and sustainable business than something that looks good short-term but is getting IBM'ed long-term. Case in point: Warren Buffett and See's Candy.
I like the steady accumulation of equity or dividends paid out to me. The business doesn't need to go to the moon for that to happen.
Warren Buffett is letting See's Candy is happily chug along, staying true to their identity (as far I hear, I'm not a customer), whereas another investor might have insisted on quick quarterly results and ended up IBMing them.
nothing should have to grow forever.
especially not amounts of natural resources, or basic necessities like food and beverages.
With desalination, nuclear + solar + geothermal, we can feed an essentially unlimited number of people.
There are always second-order effects to everything, including growth. But I find it interesting that we have such a huge runway ahead of us, without even considering resources and energy elsewhere in the solar system.
we can use the solar system, of course, but just discarding earth because other planets are available, seems a bit wasteful.
A knee-jerk response against growth is hardly going to fix the situation. We can drastically reduce our footprint while growing the economy even faster by building more nuclear + solar power, and digging deeper, improving our water treatment ability, etc.
- what do we say to poor people? Sorry your life sucks, but the economy is big enough now?
- even if we did say that, perish the thought, nobody's going to accept that. Africa, India, China, the rest of Asia, and South America have tons of poor people who want their turn. Why shouldn't they also get to be as rich as us? That implies a huge and growing demand for more and more energy and resources, regardless of what the US and Europe think of growth/degrowth/the environment.
Therefore I think it's much better to instead accelerate, and do it using clean technologies. By building clean tech in rich countries, we can make it better and cheaper until it's the default option for rapidly growing poor nations.
By demonstrating a commitment to growth, we also show them that our way is something to emulate, because growth is what they want and need. Degrowth is going to win you exactly zero friends in the poor world.
Nations like Russia and China can easily go to Africa and make the West look like self-centered rich fools who should be ignored. If that happens, there goes your environmental ambitions.
we talk to rich people and tell them, "Sorry, but we've f*cked poor people long enough now, time to adjust downwards and meet in the middle."
Plus, meeting in the middle is even less sustainable than the current situation.
The options are:
- Dramatically less (like prehistoric levels)
- Dramatically more (star trek)
Maybe ecological collapse after decades of growing the economy. After all, shareholder are worth more than humans :)
> one of the few lucky people who aren't enslaved in manual labor
Actually, we got quite a few of them, right now.
Ah, maybe that's why I like Solarpunk so much...
> In some respects it reminds me of this obscure, old web comic
which makes fun of the bourgeoisie who notice that they're not worth a lot without the proletariat ;)
Convince Western countries, which are mostly some form of republic or a parliamentary system emulating one, to lower their citizens' living standards, in order to theoretically set a better example of resource usage for developing countries, who will 100% ignore this supposed role-modeling anyway because they actually want the best possible living standards, like most people do, and they have a point that even if we start limiting things now, we didn't artificially limit ourselves for the past 100 years, so why should they not get their turn at cheap growth?
That's a pretty tricky plan. Just asking voters to accept even minor inconveniences like "Hey maybe let's not install indoor gas stoves in new construction going forward because they literally poison our indoor air" was met with fiery rage. Telling people they'll have to just consume a lot less plastic, fuel, etc. to leave more for developing countries is political suicide.
i can't change what China does, i can't really change what my country does. i can barely influence what my family and friends do.
but i refuse to believe that "just grow the economy and gather more resources" is a viable path.
Everything fails if you only look at the last few moments.
You can’t build a successful business by ignoring reality.
Look at what's happening to GM, called Government Motors when they were bailed out, they seem to be headed down the same path US Steel is. Their thinking is broken
but look at the recent decisions that led to
- recent statements about EVs
- the Cruise debacle
- deciding not to allow Apple/Google car infotainment systems and opting for a homegrown solution, despite consumers repeatedly stating they want the system that aligns with their phone
They aren't listening and management seems to think they know better
True, at least in the long term.
However some of those government interventions are an attempt to balance out other government interventions.
Sometimes tariffs are a response to a foreign government subsidizing a company in order to undercut a market and destroy dominant players.
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
Thanks for the link, some great resources on that site!
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.
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.)
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
For more specifics, I would look at this overview which is excellent:
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.
given that the US military is in the region, yes, we'd be 'able to'.
a more interesting question would be "what lead to our ally denying war-effort when prompted in the midst of a world war?"
Paging Elon Musk...
> 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. > 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.
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.
Or because to believe that propaganda as a "universal truth" it would mean unions are not self-interested entities (unlike businesses and people).
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-...
> 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.
> 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.
Someone somewhere has to be making new steel.
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.
Whether it’s a case of nobody knows who owns them, regulatory hurdles, economics of breaking it down, or some other reason, I’ve often wondered why something like entire trains can just sit collecting graffiti after a railroad shuts down.
Does anyone have any insight? Is there not an abundance of material that’s recoverable low hanging fruit compared to creating new? Or is the metal recovered not as useful for chemical/physical reasons?
Where it's borderline, someone owns it and if you steal it you might get found out eventually.
Where it's very profitable, it gets stolen and reprocessed unless guarded (see: copper).
See https://chitransit.org/topic/4239-ex-cnw-pullman-rta-cars-in... for an example.
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.
Is "how many people get employed, and at what salaries" one of them?
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
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.
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...
[1] https://en.m.wikipedia.org/wiki/List_of_countries_by_iron_or...
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.
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.
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.
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.
But you can't, because you're wrong and you know it.
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.
In Sweden (the largest industrial hub in Scandinavia), unions don't collectively negotiate wages with employers - they collectively set wages across an entire industry with the government and business management (think Syndicalism, which is the primary industrial philosophy in Europe compared to the US).
Also, blue collar membership has declined after the 2008 Financial Crisis dealt a killing blow to Volvo and Saab. Blue Collar union membership in Sweden peaked at 85% in the 1990s but has fallen to 59% in 2019.
Some American unions (primarily UAW and Teamsters) would have to fundamentally reform in order to act like European unions, and they would assuredly fight tooth and nail against such a change. Also, the kind of sector level salary negotiations common in Europe might fall foul of American collusion laws, and might anyhow be unpopular with local chapters (hypothetical example: if UAW and all major automotive manufacturers decided to set wages at South Carolina levels nationally, that would be a pay cut in the Midwest).
The characterization that they would eschew reform even when it would boost their popularity is not reflected in current events (certainly the managerial friendly unions of the past would avoid reforms)
At the end of the day, unions in Europe are much more pro-business management than any union in the US can ever dare.
For example, Swedish unions didn't go on strike when Geely fired thousands of Swedish autoworkers when acquiring Volvo, and German (yes not Nordic) unions haven't fought for salary increases leading to German salaries remaining stagnant since the 2000s, while helping German corporations like Volkswagen, Daimler, etc remain competitive globally.
In the US, unions will go militant and remain independent of the government and management because they are grassroots driven. In Europe, unions are subordinated to the government and management, as Union leaders end up joining both.
But, from the buyers perspective, I don't want union hands touching my car. I also will NEVER buy a volvo because they're bad cars from every standpoint except safety. This is the brand that though a turbo, supercharged hybrid drive-train would be a good idea in an SUV. The SUV isn't even that fast despite it!
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.
... for more than twice as much! 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.
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/
A plainspoken take on the dysfunction:
https://www.tiktok.com/@watchfulcoyote/video/731150385197721...
Steel Ind. Summary, 2021: 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-ste...
Steel Crisis and Aftermath: https://en.wikipedia.org/wiki/Steel_crisis
World Steel Production since 1800's: https://www.researchgate.net/publication/343071585/figure/fi...
How Steel Production Trends with GDP: https://upload.wikimedia.org/wikipedia/commons/thumb/a/a2/St...
Current Numbers, 2023: https://worldsteel.org/steel-topics/statistics/steel-data-vi...
Above, Charted Geographically: https://worldsteel.org/steel-topics/statistics/annual-produc...
https://www.wsj.com/articles/green-steel-is-coming-europe-is...
China also doing its moves to lead
I also laughed a lot when some article described someone (Fetterman?) commenting "in a post on X"