From the email inbox from our readers, regarding the Biden administration’s rejection of the Nippon Steel-U.S. Steel merger (and steel matters, in general):
Writes a woman whose now-retired husband was an engineer who worked for steel companies:
“Heaven help us! (But did I hear that Trump is also in favor of blocking the deal?)
“I hate the thought of U.S. industry and land being sold to foreign countries. But the steel industry has been declining for decades, which is why [her husband] lost jobs three to four times when employed by companies producing steel industry equipment.”
Another retired engineer notes that he “lived a situation where the United Steelworkers Union (USW) had a voice and unyielding support in a hostile takeover of Wheeling Pittsburgh Steel Corp.”
“The union supported the takeover by a band of thieves that only cared about lining their own pockets. Once the hostile takeover of the board of directors was completed, production was reduced, the salaried workforce was decimated and, within a year, the entire operation was up for sale.
“The venture capitalists put up about $2 million of their own (or some loan) collateral for the takeover and the entire remaining operation sold to the Russian steelmaker Severstal for $1.2 billion. (And that’s no typo.)
“The Russians never melted a ton of steel in a year and auctioned off all their purchases, including Warren Consolidated in Ohio, Bethlehem Steel Sparrows Point in Maryland, Wheeling-Pitt and one other I can’t remember.
“There was no interference of the federal or state governments in this travesty. As far as I am aware, only Wheeling Pitt’s present successor is JSW Steel of India. They are only operating what remains of the Mingo Junction [Ohio] plant melt shop and rolling mill. The product is generic steel coils for their pipe mill in Texas and coils for sale to downstream processors.
“The employment is a fraction of what it was on April 29, 2007, when all the senior maintenance managers as well as most of the engineering departments were fired, including this engineer.
“My start in steel was with Babcock & Wilcox (B&W) in Beaver Falls. After 14 years of continuous employment, the mill was part of an unsuccessful acquisition attempt by United Technologies and a competing hostile takeover by McDermott International. The McDermott takeover eventually resulted in a six-month strike by the USW.
“This, of course, led to facility closures and a reduction of the workforce. Today, only the melt shop in Koppel, Pa., and the tube mill in Ambridge are operating.
“My guess is that only 1,200 of 5,600 employees remain. The mill has gone through ownership from U.S. operators to Russian, Canadian and, now, Mexican.
“Once again, as far as I am aware, there was no governmental interference in this story. As a side bar to this, B&W had supplied tubing for, I believe, every nuclear reactor built up into the 1970s as well as boilers and reactors for every nuclear-powered warship afloat at the time.
“Talk about ‘national security.’”
Continued the writer:
“I do not trust the government, the international union, the acquiring company’s final intent or any party with financial interests in these steel-related takeovers. In other words, no one.
“Conversely, the Standard Steel facility in Burnham, Pa., my son [also an engineer] works for was acquired by Nippon about six years ago. He indicates the [Americans and] the Japanese are working well [together] in the management of the facility and capital money is being spent yearly.
[My son] supports the Japanese acquisition of U.S. Steel for good reason.”
As always, we appreciate our readers’ insights, oftentimes formed from their first-hand experiences. Informed opinions always are welcome here.
Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).
