> 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.
So the question is... did unions prevent a path to upgradation to new tech?
Quite possibly, especially if skills from old method aren't easily transferrable to the newer methods. There could also be issues with capital concerns, both finance and tax related. Perhaps a combination of all of them.
A comment above yours says that these scrap-processing mini-mills are more labor-intensive to operate, which is why most of them are in China. So... yes, seriously, a citation is needed for your claim.
Electric arc furnaces don't necessarily reduce union labor needs. They reduce the amount of energy needed and reduce the carbon emitted and are simpler to operate (yes, fewer people). But the newfound flexibility and utilization that they provide generally increases the number of union laborers the steel mill employs.
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.
> 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?
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.
> What China could not achieve by Stalinist state planning or Maoist revolutionary enthusiasm, it achieved by letting a million private-sector smelters bloom.
Oh I know. But it’s technically called a union, at least. They also funnel the morale budget through it for some strange reason, so the free movie tickets now come from the Union rather than just your employer as before.
The value of a union in China is profit for the owner of the company and control of worker organization. Going outside the ACFTU worker organization is illegal and punishable.
Don't worry middle-class and below in the future will: not be able to buy cars, not able to use fossil fuel in any way, very limited in what steel products they can buy.
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.
I’m often amazed at the giant steel structures and vehicles that sit decaying along the side of highways for decades.
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?
It's not exactly unheard of. One feature that makes unions in the United States different from other countries is that they tend to have a more adversarial relationship with employers and the government. Sectoral bargaining is very rare, if it exists at all. Union laws are a patchwork of left- and right-wing administrations' attempts to undermine each other. American culture, in particular the prominence of Manichaean narratives, may play a role in making different groups see each other as "evil" and willing to do underhanded things, whether it's the UFCW planting an ABC news story about Food Lion or Amazon ignoring labor laws to fire unionizing workers. The teacher's union and police union serve as bogeymen for one or the other political party. Advocating compromise is often met with scorn.
Not unions solely, but as other commenters have pointed out, the cost of labor more generally is what did it.
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
A huge amount of global iron ore comes from Australia. [0,1]
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.
It's been a few decades but I worked for USS as a developer, after attaining a computer science degree.
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.
> So the question is... did unions prevent a path to upgradation to new tech?
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.
This btw is why Japanese cars are better than American cars.
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.
The only thing correct in your statement is the spelling of Toyota and Lexus, and even that you only nailed one out of three times (brand names start with capitals, even in English).
Car build quality has nothing to do with unions for example, and that unions allow workers to be lazy is such wrong statememt, I din't even know where to start.
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.
We always ignore Nordic unions when ever we trash talk unions. If things were as easy as black and white then there wouldn't even be a need to debate, the productive non-union businesses would just slay and everyone would be working for them.
A tech unicorn slays, but for how long? I do think the intention of most American tech companies is to financialize some aspect of the market, and that is lucrative and "slays" - but I think such arrangements are moats built with sand. Without that angle, a tech company is just another goods or service and looks less like Uber and more like the gaming industry.
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).
UAW already went through some reforms which is arguably why they're experiencing a surge in popularity. In particular Shawn Fien was part of UAWD's 1 member, 1 vote initiative: https://uawd.org/
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)
Those reforms aren't comparable to Swedish (which I'll use as a stand in for Nordic) Unions.
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.
I'm not even trash talking unions. I love unions because I love the idea of workers being lazy (unironically!)
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!
Honest question: are Japanese industrial workers (steel, auto, etc) significantly worse off (pay, conditions, security, etc) vs Americans? I sort of assume that at this point they are an advanced economy and there would be roughly parity.
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.
> 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
... for more than twice as much! He kinda left the part out.
Why would that matter to the workers? They'll still get the same exorbitant salary that they negotiated. They could have invested in their employer just like anyone else.
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 $11B in equity in the company. [https://valustox.com/X]
Shrinking and laying off workers is rarely seen as successful. You can play games and look/stay profitable all the while the real story is far from it.
Success is typically seen as something that is improving, whether profit or market share. Shrinking while still remaining profitable sits in a more gray zone. I think most don't see this as successful, but I wouldn't call it a complete failure either, unless you consider selling a local company to a foreign company a failure.
Their fiduciary duty is to the investors first afaiui, perhaps they saw that selling to someone who can run the company better as a net benefit overall?
I've heard Japanese steel is pretty great, or at least a common sentiment
I hoped someone would have additional data to add, thanks!
Is a scandal at one company evidence for the entire industry in a country?
Is there similar information about other Japanese companies? What about the industry at large? The prevailing sentiment is that Chinese steel has similar issues.
As someone who was in the Aluminum business during that time, this is a lot more complicated than it might appear. There was an absolutely insane amount of fraud being committed in the industrial aluminum biz during this time, here’s an article[1], but a lot of my experience isn’t really documented online or has been lost. What made this really troublesome was that ingots aren’t really sold direct to customers, so often times you have a contractor or sub contractor buying extrusions ($xxxxx)from a megacorp like SAPA(an extruder) who in turn is buying from a metal market($M+). The extruders doesn’t want to deal with material defects from Aluminum that was supposed to be to spec, and their customers can’t really play hardball as the industry is pretty niche-extrusion presses are capital intensive and require a fair amount of sophistication to operate.
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.
If YouTube goes from having 100% market share to the 27th-largest video site, you will definitely say that it has failed. That is the history of US Steel.
Youtube is a platform business. Being in the top 5 is everything because that's how you get creators and consumers. If Youtube fell to #27, it would be a ghost town and lose a ton of money.
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.
Fair. But it's not like US Steel has just been humming along for decades printing money. There are a lot of failure smells about it. Hundreds of thousands of people have been laid off at least once. Dozens of mills have been shut down.
Correct. But they seem to have sorted out many of the biggest issues. They could probably continue profitably as-is for the foreseeable future though, which is really the most you can hope for from a business.
While I actually agree with you personally that not everything should have to grow forever, a business that "just" delivers a consistent profit every year is considered a failure by those who expect YoY capital appreciation (at some multiple of the interest rate on a savings account), i.e. shareholders. Such businesses usually get sold to someone with a "growth" plan for them, which is usually some combo of combining overhead expense by merging it with another business, cost-cutting, as well as the more toxic short-term tricks such as selling all their owned land and leasing it back to goose profits for a few years. Oh, and share buybacks.
I'm sure that's true for many shareholders; anecdotally I'm a very happy US Steel shareholder (especially after today!).
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.
We've barely scratched the surface of the planet, literally. The deepest mines are 4km deep; mineral deposits are likely to get richer as you go deeper.
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.
More intensive resource use is also the answer to climate change. The problem is CO2 & friends, not growth itself.
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.
I don't think it's practical to lower or keep it at the same level.
- 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.
Every happy person depicted in solarpunk artwork is the survivor of a mass casualty event and one of the few lucky people who aren't enslaved in manual labor colonies. That's the only way the solarpunk economy makes any sense.
True. I will give the Solarpunk people that much. Like Marx they have identified a real problem with society. Like Marx their proposed solution isn't going to work. In some respects it reminds me of this obscure, old web comic, in which the protagonists embark on their glorious future but forget to bring their inexhaustible labor robots.
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.
look, i'm one guy on the internet, i will not be able to provide a global solution. but i think the current situation is not sustainable in the slightest. i try to act how i'd like people to act. i vote for or support things which matter to me.
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.
I have no comment on this specific case, but in general: all of those things—all government interventions that ostensibly protect an industry or company—make it more brittle, less efficient, and more likely to fail. That is precisely the point.
You can’t build a successful business by ignoring reality.
The gov't might support an industry, but it should not pick winners in it.
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
Are you saying GM's thinking is broken or the governments? GM did what was in their own best interests, the other was to declare bankruptcy - what company would have chosen different?
GM's thinking, not from the bailout, that is probably more a symptom
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
Defense companies are squarely in the "national interest" bracket. I think steel should be as well, though it's more of a grey area since they also supply civilian demand for steel whereas no-one's buying an F-35 for their personal use (right?!)
This has been covered extensively elsewhere, even in 101 level macroecon courses. Literally the worst method of protecting “strategic” supplies is to subsidize the industry producing them.
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.
The insane conspiracy theorist in me immediately started thinking Elon Musk is behind this so he can get the ticket symbol (US steel is X on the NYSE.)
an easy response is "Our government no longer believes steel is critical to our national security"
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
The country that will acquire is also important in this equation. Russians were blocked from buying Oregon steel for example. Japan is more like a protectorate of the US than a fully independent country post WW2, with specific articles of the constitution that block army sizes, specific military equipment, agreements for maintenance of permanent US bases and troops in the country etc. Even when recently they decided to re-interpret these articles this was done only with the express permission of the US.
True that there is no more loyal ally than Japan aside from perhaps Canada. Kind of miraculous that that happened, honestly, considering that the phase of our relationship immediately before this was "fighting to the death" followed by "atomic bomb dropping" -- but I'm grateful that somehow it has come to be an enduring friendship both politically and really culturally as well.
I mean, the US did a huge occupation and education campaign which depending on how you categorize "force someone to keep your army within their borders" could even be seen as them not actually being sovereign. People are fast to forget that part the same way they forget Poland was only liberated truly in 1989, it's not such a good story when you include those parts.
Japan was one of the biggest trade threat for the US until around 2000, caused many trade conflicts, so perhaps this would be stopped if it's in 1985. It's no longer so big, now it's China.
This will be interesting. I wonder what will happen to Dr Larrin Thomas (https://knifesteelnerds.com/about-me/) he's been able to bring some new knife steels to market while working for US Steel by day. Wonder if Nippon allows side gigs.
I do have a bar of 40-layered high-carbon steel from Nippon Steel and another one of white-paper-and-low-carbon-steel with a iron (!) core from Hitachi in the basement waiting to be forged into swords. So, going from that, I think the Japanese (!) management should be fine, the local US management might different so.
Thanks for the link, some great resources on that site!
If you are new to knifesteelnerds, but not steel in general, and like blades, don’t just check out the site, make a beeline to read about Magnacut. Super cool and exciting.
I'm interested in how the United Steelworkers thinks about the generally better track record of Japanese companies with labor relations vs. American management.
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.
I don't think that applies as much to line workers in the overseas subsidiaries of Japanese companies as it does in the central company. Like, Square Enix's former European divisions, Sony of America, all run much more like companies in their home countries than like their parent company.
I believe Toyota @ NUMMI actually showed that they could win over the union and get everyone bought into their lean culture, but it took time / patience.
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.
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.
My argument is essentially that USS is a broken dinosaur like GM, and I think a NUMMI-style culture shakeup could actually work.
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.
Right, and that could be just as much a reflection of the fact that American workers are very different than Japanese workers. Also in a high-cost place like the Bay Area I can see how it would be hard to make a case to keep that particular plant, instead of an inland plant like 90% of foreign automaker US plants are.
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.
I stand corrected. Yes, Saturns were in TN, not Fremont plant. The whole GM, NUMMI, Saturn story was playing out in a collective moment circa 2010. Here is an audio interview in This American Life series a week before NUMMI was to close.
Japanese companies in the US follow US labor laws, and no more. Big US companies are also subject to political pressure, which the unions can exert, more than foreign companies.
Exactly. Union leaders are powerful because they control a large voting bloc and so have local/national politicians at their fingertips. If you take that away then they are left with a normal, boring job.
There are many ways to follow US labor law though. You can be really antagonistic, or you can try to be more collaborative.
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.
The problem is that there isn't much union solidarity across countries and companies have completely different labor relations in different countries.
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.
NUMMI wasn't just Toyota, it was a collaboration between GM and Toyota. So this example isn't really representative of typical Japanese automaker presence in the country.
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 it seem like it was purely an "American First" kind of sentiment
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
Anecdotally, US labor union relations have been strained for some time compared to international settings. Plausibly, this is in part due to the size of American labor unions compared to their international equivalents.
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.
There is a 25% tariff on steel imports and American steel companies are still failing. What did the tariffs do other than raise prices of steel for Americans?
One American steel company is "failing". And by "failing" you mean still producing billions in profit every year, leadership just decided they wanted to cash out.
> We were ignored, slandered, and our votes were never counted. Literally, the State of Texas does not count votes in Presidential Elections for "third parties."
You understand that's by design, right? In most states (likely all, but I can't be bothered to check if there's an exception), a candidate has to register as a "write-in candidate" or votes writing in their names won't be counted at all. Ostensibly, this was done when people were actually writing on paper, and it might be impossible to count 100,000 unique write-in names if 100,000 voters voted for unique names.
Now, in the digital/electronic voting machines where there would never need to be separate first class candidates and second class "write-in" candidates, the system is preserved for whatever reason.
I mean there are 4 people on the ballot for POTUS, or you can request a write-in ballot. If you vote for anyone outside the D/R establishment, they reject your ballot.
> I mean there are 4 people on the ballot for POTUS, or you can request a write-in ballot. If you vote for anyone outside the D/R establishment, they reject your ballot.
Two of the four parties on the ballot are “outside the D/R establishment” (the four parties being the Democrats, Republicans, Libertarians, and Greens.)
Additionally, its possible for other parties to qualify for ballot access, neither the number nor the identity of the qualified parties is fixed.
This is very bad for America. We need to keep some degree of industrial steel capacity capabilities in house.
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.
How in-house does it need to be? The actual physical facilities aren't being shut down; they're just under new ownership and management. And Nippon Steel is located in Japan, which is such a dependable ally of the US that I'm politely trying not to use the phrase "vassal state."
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.)
US Steel was a major contributor of steel for the WWII military machine. Honest question: if WW3 were to start, would we be able to appropriate Nippon-owned USS factories for wartime use?
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.
In the event of WW3 it's going to involve either Russia or China, neither of whom Japan would even consider allowing to come to further dominance, even by inaction. Japan would be at the White House Day 1 of the war offering their 100% backing including all steel production in both countries if needed.
> US Steel was a major contributor of steel for the WWII military machine. Honest question: if WW3 were to start, would we be able to appropriate Nippon-owned USS factories for wartime use?
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?"
My theory is they want to use Japan do R&D to green-wash their steel industry and to absorb all of the related costs, they'll then get it back with bunch of new IPs as a result, Japan is.. hum.. kind
Kind of ironic to be arguing about capitalism vs socialism while a foreign company buys the means of production out from under us.
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:
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[ 3.6 ms ] story [ 215 ms ] threadThe 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.
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)
[0]https://en.wikipedia.org/wiki/Solarpunk
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.
https://www.angryflower.com/348.html
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.
I also laughed a lot when some article described someone (Fetterman?) commenting "in a post on X"
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
https://en.wikipedia.org/wiki/U.S._Steel
Thanks for the link, some great resources on that site!
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.
https://www.thisamericanlife.org/403/transcript
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.
https://www.google.com/finance/quote/X:NYSE
You understand that's by design, right? In most states (likely all, but I can't be bothered to check if there's an exception), a candidate has to register as a "write-in candidate" or votes writing in their names won't be counted at all. Ostensibly, this was done when people were actually writing on paper, and it might be impossible to count 100,000 unique write-in names if 100,000 voters voted for unique names.
Now, in the digital/electronic voting machines where there would never need to be separate first class candidates and second class "write-in" candidates, the system is preserved for whatever reason.
Two of the four parties on the ballot are “outside the D/R establishment” (the four parties being the Democrats, Republicans, Libertarians, and Greens.)
Additionally, its possible for other parties to qualify for ballot access, neither the number nor the identity of the qualified parties is fixed.
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?"
https://www.wsj.com/articles/green-steel-is-coming-europe-is...
China also doing its moves to lead
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...
Paging Elon Musk...
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...