Honestly, Who Cares Who Owns US Steel as Long as the Jobs Stay? Derek Hunter

[mystery-ak]

Honestly, Who Cares Who Owns US Steel as Long as the Jobs Stay?
Derek Hunter
5–6 minutes

I’ve had a lot of jobs in my life – seriously, like more jobs than most families have had, somewhere around 80 of them. Not careers, most of them, but retail, waiting tables, roofing, etc. In all my jobs, even the “real jobs,” as some people would classify them, I rarely knew, and never cared who owned the company. Why would I? I was working for money – working to live, never living to work – so who owned whatever radio station or website I worked for didn’t matter, that the checks cleared did. That’s why I don’t get why steelworkers union seems to care so desperately about who own US Steel when, at least to me, the only thing that matters is the people working there still have jobs.

US Steel has been in financial trouble for some time. Once the most valuable company in the country, those days are long since gone. As CNN put it just last year, “US Steel could be yet another iconic company for which time has run out.”

They described US Steel as “the subject of a bidding war among rivals offering a fraction of what the company was once worth.”

Well, someone stepped up and offered to buy it – Nippon Steel. They offered up $14.9 billion. If I were a US Steel employee, I’d breathe a heavy sigh of relief that the checks will keep coming. For some reason, this news was not met with the happiness I would have expected it to be.

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https://townhall.com/columnists/derekhunter/2024/02/15/honestly-who-cares-who-owns-us-steel-as-long-as-the-jobs-stay-n2635233

[Timber Rattler]

Derek is missing the point.  It's not about the jobs with U.S. Steel, but its critical importance to National Defense since there are no other steel companies left in America capable of turning out enough metal to build our ships and military vehicles, which is why you don't want to give it up to foreign control.

[Maj. Bill Martin]

Derek is missing the point.  It's not about the jobs with U.S. Steel, but its critical importance to National Defense since there are no other steel companies left in America capable of turning out enough metal to build our ships and military vehicles, which is why you don't want to give it up to foreign control.

So it's better to have it go out of business?

Anyway, the Japanese are allies, but if for some weird reason we got in a war and needed that steel production to be owned by Americans, the plants will still be here and they can always be seized through eminent domain or the War Production Act.

I'm with the author.  Better to have Nippon Steel buy and modernize U.S. based steel facilities than have them go out of business or be bought by someone unwilling to make the investments necessary to keep them operating

[Timber Rattler]

So it's better to have it go out of business?

Anyway, the Japanese are allies, but if for some weird reason we got in a war and needed that steel production to be owned by Americans, the plants will still be here and they can always be seized through eminent domain or the War Production Act.

I'm with the author.  Better to have Nippon Steel buy and modernize U.S. based steel facilities than have them go out of business or be bought by someone unwilling to make the investments necessary to keep them operating

No, but in that specific case, I think that Congress and the DoD should step in and save it as critical National Defense infrastructure, like the old Army ordnance plants during World War II.  We'll just have to agree to disagree since I don't entirely trust the Japanese to remain friendly to the U.S. into the far future.  The Bushido code still lies deep within their culture, albeit latently.  And once that plant is gone, it's gone for good.

[mountaineer]

I'm with the author.  Better to have Nippon Steel buy and modernize U.S. based steel facilities than have them go out of business or be bought by someone unwilling to make the investments necessary to keep them operating

The Japanese purchased a steel mill several years ago in a small W.Va. town not too far from Pittsburgh, and the company is now called Wheeling-Nisshin (aka Wheeling-Nippon, owned by Nippon Steel Corp.). They really whipped it in to shape, from what I've heard. The workers are still members of USW, but the company is more efficiently run than it was under American ownership. It's still in operation, unlike the steel company - Weirton Steel - just a few miles upriver (see my comments about that on this thread).

[sneakypete]

What makes that goober thing that the Japanese will even keep the plant in the US,never mind keep the current union employees employed?

AND....,steel is a vital American asset,and we can't afford to lose it because some foreign nation now owns it and decides to cut us lff.

[Hoodat]

I'm with the author.  Better to have Nippon Steel buy and modernize U.S. based steel facilities than have them go out of business or be bought by someone unwilling to make the investments necessary to keep them operating

Agree 100%.  And if we're lucky, the upper executives of other American steel producers will get a view of how the Japanese successfully run businesses and learn a thing or two.  Seriously, the Japanese have been kicking our asses for over 40 years now with automation and kaizin business philosophy.  And American businesses still refuse to adapt.

[Hoodat]

No, but in that specific case, I think that Congress and the DoD should step in and save it as critical National Defense infrastructure, like the old Army ordnance plants during World War II.

Not just 'no', but 'HELL NO!'  The LAST thing we need is government getting involved.  If you want steel to keep coming out of this plant, then turn it over to people who know how to run business and manufacture steel in a fully competitive market.  There is NO ONE in government that knows the first thing about any of that.

[Hoodat]

The Japanese purchased a steel mill several years ago in a small W.Va. town not too far from Pittsburgh, and the company is now called Wheeling-Nisshin (aka Wheeling-Nippon, owned by Nippon Steel Corp.). They really whipped it in to shape, from what I've heard. The workers are still members of USW, but the company is more efficiently run than it was under American ownership. It's still in operation, unlike the steel company - Weirton Steel - just a few miles upriver

And this, boys and girls, is why you get government the hell out of the way and allow the market to do what it does best.  And you can bet your sweet ass that Nippon executives aren't schmoozing it up with politicians trying to get them to handicap their competitors with protectionist trade laws so that they can kick back and continue with business as usual.

[the OlLine Rebel]

I generally like Hunter, but have to disagree.

I mean, “having jobs” is nice.

But first off, they will mostly be (union) turn-screw jobs.  They will not be braintrust jobs.

Second, the profits go to Japan, and the MITI.  Or whatever country owns it.  It’s is mostly helping Japan.

Never mind if they are enemies using “their” property right here in the US geography.

We go crazy when China might own something.  That should apply universally.  You never, ever know.  Including your “friend’s” entanglements.

People pull this all the time with Jap cars, e.g.  “ooobut they BUILD them here!”  But they don’t get the full profits and they don’t require engineers, etc.

[Hoodat]

What makes that goober thing that the Japanese will even keep the plant in the US

Oh yeah, that makes perfect sense.  Japan leads the world in steel technology, yet they are going to take some old crappy inferior inefficient US steel furnaces and ship them back to Japan at an astronomical cost instead of simply building a new plant.

I got news for you.  That US-made Japanese steel is going to end up at Toyota plants in Alabama, West Virginia, Indiana, Tennessee, Mississippi, Texas, Kentucky, etc.  And Honda plants in Alabama, Ohio, and Indiana.  And Nissan plants in Mississippi and Tennessee.  And BMW and Mercedes plants in South Carolina.

[the OlLine Rebel]

Derek is missing the point.  It's not about the jobs with U.S. Steel, but its critical importance to National Defense since there are no other steel companies left in America capable of turning out enough metal to build our ships and military vehicles, which is why you don't want to give it up to foreign control.

The sad thing is TR, our ships etc were already taking foreign steel in the ‘90s.  Just not enough here.

[sneakypete]

Oh yeah, that makes perfect sense.  Japan leads the world in steel technology, yet they are going to take some old crappy inferior inefficient US steel furnaces and ship them back to Japan at an astronomical cost instead of simply building a new plant.

@Hoodat

WHERE did I say,or even imply that?

I think it more likely  they will just slow down US production,and eventually stop it. What do THEY care about US jobs?

They will basically OWN the western steel industry,and you  WILL pay  their shipping costs and be happy to do so!

I got news for you.  That US-made Japanese steel is going to end up at Toyota plants in Alabama, West Virginia, Indiana, Tennessee, Mississippi, Texas, Kentucky, etc.  And Honda plants in Alabama, Ohio, and Indiana.  And Nissan plants in Mississippi and Tennessee.  And BMW and Mercedes plants in South Carolina.

And NONE of those plants are owned by Americans.

I don't know,but  SUSPECT the foreign owners of plants like these still have to pay taxes in the US on profits made in the  US,but the vast majority of the money they take in will go back to Japan.

[Hoodat]

@Hoodat

WHERE did I say,or even imply that?

I think it more likely  they will just slow down US production,and eventually stop it.

They can do that without spending a dime.  But they need steel here in the US.  And it will be cheaper for them to make the steel here instead of importing it from Japan, India, etc.

What do THEY care about US jobs?

They don't.  Nor do the current plant owners.  But Nippon does care about creating wealth by manufacturing steel.  And clearly, they know a hell of a lot more about that than does USX.

They will basically OWN the western steel industry,and you  WILL pay  their shipping costs and be happy to do so!

As opposed to no one owning the western steel industry because there won't be any western steel industry left.  And we still end up paying, except we will be paying a lot more for shipping it across the Pacific instead of creating it here for less than what USX currently charges.

And NONE of those plants are owned by Americans.

So what?  It is preferable to this American-owned steel plant that employs zero workers.




I will work for a Japanese-owned company any day of the week over sitting with no paycheck at a shuttered-up American-owned plant.

I don't know,but  SUSPECT the foreign owners of plants like these still have to pay taxes in the US on profits made in the  US,but the vast majority of the money they take in will go back to Japan.

It is not a zero-sum game.  Well-run plants create wealth.  Plenty of wealth to go around.  So instead of envying the Japanese for making profits, why not consider the thousands of households that will be earning salaries here in the US because this plant begins earning money again.

[sneakypete]

They can do that without spending a dime. But they need steel here in the US.  And it will be cheaper for them to make the steel here instead of importing it from Japan, India, etc.

@Hoodat


WTH would the Japanese be worried about cheaper shipping costs,when they can use the money they save by NOT making steel here in America to hire more Japanese steel workers,and built more Japanese cargo ships to ship it and sell it to us.

After all,where else are we going to buy the steel from?

NO country will last long as an independent nation when they sell their industrial base to foreign nations. We WILL eventually "be their bitches".

Then again,maybe we can rent our military out to the Japanese in order to get some price breaks on the steel?

"We iz da wurld,we iz da bitches for hire......."

[Hoodat]

@Hoodat

WTH would the Japanese be worried about cheaper shipping costs,when they can use the money they save by NOT making steel here in America to hire more Japanese steel workers,and built more Japanese cargo ships to ship it and sell it to us.

A Toyota plant in Madison, AL creates demand for steel.  Nippon who makes steel sees a money-making opportunity.  So they manufacture steel at their Japanese plant and ship that steel overseas to the US, and warehouse that steel until the time of purchase by Toyota.   Nippon is making money, but their profits could be higher if they didn't have to pay to ship that steel across the Pacific and didn't have to deal with logistics issues once it arrives in the US.  Nippon sees an opportunity to manufacture that steel right here in the US much closer to buyers.  So Nippon makes that investment to reduce their costs overall and remain competitive.

Now ask yourself why Toyota is making cars here when they could be making them in Japan instead.  Again, it is to save money.  It costs less overall to make the cars closer to the point of sale, just at is costs less overall for Nippon to make steel closer to the point of sale.

So again, why would Nippon spend huge sums of money investing in a US plant if their goal is to not use that plant?   They can already do that for free.  And why did Toyota build plants in the US if their goal is to close those plants and move their operations to Japan?  Your premise is backwards.

[Timber Rattler]

If you want steel to keep coming out of this plant, then turn it over to people who know how to run business and manufacture steel in a fully competitive market.  There is NO ONE in government that knows the first thing about any of that.

And therein lies the problem...the U.S. steel industry has shrunken so much that there is NOBODY LEFT outside of U.S. Steel that knows the business and how to supply and operate the mills.  I'm not saying that the government should run the company but protect it and its assets, as they did in World War II.

Have you ever heard of the old Defense Plant Corporation?

It built the plants and equipped but then leased them out to private operators.  That worked pretty damned well at the time.

https://en.wikipedia.org/wiki/Defense_Plant_Corporation

The Origin of the Defense Plant Corporation Leases

https://www.jstor.org/stable/2113638

[Timber Rattler]

Oh yeah, that makes perfect sense.  Japan leads the world in steel technology, yet they are going to take some old crappy inferior inefficient US steel furnaces and ship them back to Japan at an astronomical cost instead of simply building a new plant.

I got news for you.  That US-made Japanese steel is going to end up at Toyota plants in Alabama, West Virginia, Indiana, Tennessee, Mississippi, Texas, Kentucky, etc.  And Honda plants in Alabama, Ohio, and Indiana.  And Nissan plants in Mississippi and Tennessee.  And BMW and Mercedes plants in South Carolina.

Here's another reason I don't trust the Japanese in the long term...they were the ones who helped destroy the U.S. steel industry in the first place in the 1960s and 1970s by dumping their crappy cheap steel into the American market (and I'm not ignoring the U.S. Steelworkers Union's role in that destruction either).

https://www.americanmanufacturing.org/blog/steelworkers-remember-when-imports-from-japan-caused-a-crisis-and-draw-parallels-to-today/

https://www.nytimes.com/1978/01/10/archives/new-jersey-pages-us-penalty-cut-in-steel-dumping-by-the-japanese.html

The Steel Dumping Issue in Recent U.S.-Japanese Relations

https://www.jstor.org/stable/2643819