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

cnn.com

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

#11

Post by coffeeshopgoth »

astrea wrote: post #6

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.

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.

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

#12

Post by Supermancho »

ryzvonusef wrote: post #3
ryzvonusef wrote: post #2

> 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 sta…

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…

> 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-...

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

#13

Post by JKCalhoun »

ryzvonusef wrote: post #2

> 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 sta…

Finger pointing aside, this does seem like a sad outcome for the U.S.

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

#15

Post by MisterTea »

adastra22 wrote: post #9
ryzvonusef wrote: post #3

Earlier quoted context omitted.

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…

Yes, absolutely.

[citation needed]

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

#16

Post by bombcar »

ryzvonusef wrote: post #3
ryzvonusef wrote: post #2

> 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 sta…

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…

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.

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

#17

Post by adastra22 »

MisterTea wrote: post #15
adastra22 wrote: post #9

Earlier quoted context omitted.

Yes, absolutely.

[citation needed]

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?

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

#18

Post by bushbaba »

bombcar wrote: post #16
ryzvonusef wrote: post #3

Earlier quoted context omitted.

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…

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.

Or if demand for steel increases

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

#19

Post by kranke155 »

FredPret wrote: post #10
eunos wrote: post #5

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

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 ]

One more misinformed HN top comment.

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

#20

Post by Aunche »

Supermancho wrote: post #12
ryzvonusef wrote: post #3

Earlier quoted context omitted.

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…

> 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 e…

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.

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