Today's announcement reports that Nippon Steel is
offering $14.9 billion to purchase U. S. Steel. Assuming
that the appropriate agencies approve this purchase, does
can anyone speculate about the consequences for the
U. S. Steel plant on Zug Island?
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Today's announcement reports that Nippon Steel is
offering $14.9 billion to purchase U. S. Steel. Assuming
that the appropriate agencies approve this purchase, does
can anyone speculate about the consequences for the
U. S. Steel plant on Zug Island?
Lots of protesters joining up to force them to change their name to a “non Nip” sounding one?
Course the youngsters would not understand that one so it might just fly under the wire.
Nucor is a U.S. steel supplier,their stock has been jumping,U.S. Steel already pulled most operations from Zug island and sent it to Gary,but it has been for sale for a long time. It’s a kind of don’t hold your breath thing.
Michigan still has a lot of heavy industries that use steel in production,outside of flat stock for the manufacturers,I am not sure where they are currently getting it from.
Germany took over most of the auto manufacturer steel suppliers in the south,I guess we really do not need to actually invest in our own country.
Considering the region as a whole does not want dirty industry or the good paying jobs it brings it would be a headache to invest billions into Zug Island ,otherwise U.S. Steel would have already done it instead of Gary.
So unless we go into a world war and need to ramp up production using every single available means,my guess is eventually Zug Island will become an apoplectic contaminated wasteland that will serve nobody any benefit for the next 100 years.
It’s probably cheaper to just buy Chinese steel from Canada anyways.
Could probably build a nuke power plant there,gonna need to get power from somewhere to charge the EVs.
But the steelworkers Union vowed to block the sale anyways because of the sale to a foreign country,but interesting enough never said boo when Germany purchased and established steel factories here.
If it was thought a good thing the stock would have jumped from its price of $48.38 verses Nucor $177.86.
Notice the difference in the values,Nucor is non union- U.S. Steel is union.
The deal is for $14 billion which sets the value of U.S. steel when compared to Nucor at $42.5 billion.
As iconic as U.S. steel is ,they actually peaked in 1916 and declined ever since,a slight boost immediately after the war because European industry was leveled to the ground.
If the union and politicians back down and the deal is completed it would make Nippon the largest steel company in the world ousting China.
Lots of Ifs involved and one cannot even begin to speculate how it will effect Zug Island,no matter what happens to Zug Island,it’s Canada that will feel the effects.
But remember With buy America requirements in government contracts and considering a trillion dollar infrastructure pile of cash is up for grabs.
Paying $14 billion in order to tap into that trough is pennies,so on the other hand the shear requirement to grab that may have an impact,even if short term on Zug Island simply because the demand may require it.
It’s more complex than that but flip a coin.
It’s also a question being asked in multiple cities across the country with idled U.S. Steel plants,so you can bet there will be an incentive bidding process involved so it will actually be up to the state of Michigan and Detroit as to how hungry you are,more so then Nippon because they will be the ones holding the cards.
So the real question is,what do you want to happen with Zug Island and steel production,along with the jobs,and how bad do you want it to happen?
Your only saving grace,if you want to call it that is,although Nippon can build new facilities in the south and out from under the arm of the unions,but that would take years and the pile of cash is there right now,so they do not have years.
But remember also in the background,like I posted,Michigan has a heavy steel industry outside of the auto world,so you do not really want to shoot yourself in the foot and lose that in the process.
But that will be a bridge to cross at that time,hopefully it will be a better decision making process when compared to the first bridge to nowhere.
Thank you very much, Richard, for an extremely informative and
thoughtful comment about the future of the steel plant on Zug
Island.
We completely rebuilt "D" furnace in 2018/2019 and most of "B" furnace in 2019/2020. New furnaces and switched over to natural gas burners. They can be fired up with a little bit of tinkering. The place still has value as a steel mill. Labor might be more of a concern than the mill. Also, DTE still runs the Coke plant.
Quote:
Originally Posted by Richard
Good info,hopefully it can be brought back online and ramped up in the best interests of the local and national level.Quote:
Originally Posted by casscorridor65
It was kinda sad to see when they shut the rail cars down after 100 years in service,like a little piece died.
I am still not sure why the labor unions oppose it so much,I understand the national implications but they did not oppose the other foreign companies from establishing facilities in this country before.
And Michigan had no issues with allowing the Chinese to partner with Ford on U.S. soil even more so after they were not allowed to retain control over the California ports.
The USW has said repeatedly for months that it would only support a bid by US steelmaker Cleveland-Cliffs Inc., which made a $7.25 billion offer in August to buy its Pittsburgh-based competitor.
https://www.detroitnews.com/story/bu...k/71962537007/
In the deal announcement on Monday, Nippon Steel said it would honor all agreements between U.S. Steel and the union, including collective bargaining pacts.
The United Steelworkers slammed the company’s decision in a statement Monday, saying it demonstrated “the same greedy, shortsighted attitude that has guided U.S. Steel for far too long.”
https://www.nytimes.com/2023/12/18/b...teel-deal.html
I do not know though,considering U.S. steel has one of the lowest stock values of steel companies,how greedy are they,when you reach that threshold where your labor costs outstrip your production sales,you get what happened a failing company where nobody has a job.
Considering the other steel companies are non union the USW is kinda running out of options as to place’s of employment.
It did not fare well in Pittsburgh with the double whammy of losing the steel mills and the auto manufacturing plant.
Hopefully they can work it out but I do not believe a union should be powerful enough to dictate what private company can sell its self and to whom,it makes it look like a socialist club verses a workers rights protection group.
Nippon does not compete with the commodity steel market,they go for the high end market so they will not be in competition with Nucor or Steel dynamics who use electric arc furnaces.
I am not in a union,never have been so not all that knowledgeable about their inter workings but on the surface they shure seem to be shedding jobs across a broad spectrum and seem to take the stance of my way or the highway and it seems like a lot of decades established companies are choosing the highway as of late.
Not sure why USW does not just buy U.S. steel and co-op it,granted some of those businesses have made horrible decisions,including U.S. steel but if they are that good at telling other how to run the business and what is expected of them,it just seems as though they would be in a better position with all of that expertise to just buy the business and run it themselves.
Of course the workers would not be able to collect a pay check when sales are down,but you cannot have your cake and eat it too.
The truth is they should just shut all of the greedy businesses down,so everybody can be unemployed and starve equally,that should teach them a lesson on expecting after investing billions some kind of return.