Still Bigger Than US Steel ?

(Still Bigger Than U.S. Steel ?)

In the Mob Classic The Godfather Part II, Jewish gangster Hyman Roth, a compatriot of Boss Vito Corleone, was singing the praises of the Bautista government in Cuba. A friendly regime that would allow the Organization to make its profits. As Roth put it, they were "bigger than U.S. Steel."


Organized Crime is not what it had been in the days of Hyman Roth, having instead to look to The Sopranos. But U.S. Steel is not the same since the days of Roth either. This is not the company originally founded by Andrew Carnegie. The price of steel has fluctuated over the years and like all heavy industries, steel is vulnerable to supply and labor difficulties. Steel plants have been idled. In fact, the state of U.S. Steel is such that there is an acquisition attempt from Japanese concern, Nippon Steel.


On the surface, that would seem like a bad idea. Any industry as critical as steel production should be kept in country, so to speak. However, what happens when the domestic concern is mis-managed to acquisition, even by a foreign power ? Like Japan ? It had been American steel that sent the Imperial Japanese Navy to the bottom of the Pacific so when Nippon says it can re-vitalize U.S. Steel, one understandably gets pause.


Unless the employees at U.S. Steel are amenable to such a deal. Japan is known for its efficiency and when applied to U.S. Steel, things could improve ? The movie Gung Ho comes to mind. The bottom line is that U.S. Steel could benefit with a merger with Nippon. Then President Biden halted the merger. Any attitude by President Trump remains to be seen. 


The possibility exists of the whole steel industry collapsing. That would mean the great furnaces going cold. That means all the steel workers get laid off. Steel imports are subject to tariffs. With regards to China, U.S. Steel is not competing and a joint venture with Nippon could level the playing field. Those consequences apparently did not occur to the President.


Any joining necessarily runs the risk. That being said, assurances are being given that Nippon's footprint will be small. No staff changes are being anticipated or any interference at the local level. Should one so roll the dice ? Ask Hyman Roth.

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