1 00:00:02,800 --> 00:00:10,479 Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. In March, Takahira Moury, 2 00:00:10,600 --> 00:00:13,920 Speaker 1: a senior executive at Japan's largest steelmaker, hopped on a 3 00:00:13,960 --> 00:00:16,079 Speaker 1: flight from Tokyo to Pittsburgh. 4 00:00:16,480 --> 00:00:18,560 Speaker 2: He'd come all the way to the halter of the 5 00:00:18,560 --> 00:00:21,840 Speaker 2: steel workers, you know, this hollow ground of the American 6 00:00:21,920 --> 00:00:24,160 Speaker 2: labor movement, of the American steel industry. 7 00:00:24,400 --> 00:00:27,760 Speaker 1: Josh Wingrove covered the fallout from the visit for Bloomberg News, 8 00:00:28,000 --> 00:00:31,040 Speaker 1: and he says, Maury flew all that way to clinch 9 00:00:31,120 --> 00:00:34,680 Speaker 1: a big deal. His company, Nippon Steel, wanted to acquire 10 00:00:34,880 --> 00:00:38,800 Speaker 1: US Steel Corporation, which was once the largest company in 11 00:00:38,840 --> 00:00:39,360 Speaker 1: the world. 12 00:00:39,760 --> 00:00:42,440 Speaker 2: Really it was an olive branch. He's trying to convince 13 00:00:43,040 --> 00:00:44,720 Speaker 2: the union leader to get on board. 14 00:00:44,960 --> 00:00:47,519 Speaker 1: On the other side of the table was Dave McCall, 15 00:00:47,880 --> 00:00:52,080 Speaker 1: the head of the powerful United Steelworkers union. In corporate takeovers, 16 00:00:52,280 --> 00:00:55,320 Speaker 1: unions don't always hold much sway, but due to a 17 00:00:55,360 --> 00:01:00,400 Speaker 1: combination of timing, circumstance, and politics, in this deal they do. 18 00:01:01,040 --> 00:01:04,360 Speaker 3: Dave McCall and his team sat in silence. 19 00:01:04,520 --> 00:01:07,800 Speaker 1: That's Joe Doe. He covers medals and mining for Bloomberg News. 20 00:01:08,160 --> 00:01:11,520 Speaker 3: You send one of your highest ranking executives of a 21 00:01:11,640 --> 00:01:16,680 Speaker 3: top five global steelmaker fifteen hours to the United States, 22 00:01:16,720 --> 00:01:20,920 Speaker 3: and there's an expectation that a substantial conversation will occur. 23 00:01:21,240 --> 00:01:24,480 Speaker 1: But that is not what happened. A lot of people 24 00:01:24,480 --> 00:01:27,840 Speaker 1: thought this landmark deal was a corporate slam dunk, but 25 00:01:28,000 --> 00:01:31,160 Speaker 1: talks fell apart in less than an hour. The future 26 00:01:31,200 --> 00:01:34,440 Speaker 1: of the deal is now uncertain, in part because it's 27 00:01:34,480 --> 00:01:37,240 Speaker 1: happening in the crucible of a presidential election. 28 00:01:37,480 --> 00:01:41,360 Speaker 2: The issue is the politics, and the politics is the Union. 29 00:01:41,400 --> 00:01:45,319 Speaker 1: And now there are huge consequences for President Biden, former 30 00:01:45,360 --> 00:01:50,720 Speaker 1: President Trump, and the entire American steel industry. Today on 31 00:01:50,760 --> 00:01:53,720 Speaker 1: the show, what this front US Steel deal tells us 32 00:01:53,720 --> 00:01:57,520 Speaker 1: about American manufacturing and union politics and what it could 33 00:01:57,560 --> 00:02:00,640 Speaker 1: mean for Joe Biden and Donald Trump. This is the 34 00:02:00,640 --> 00:02:06,600 Speaker 1: Big Take podcast from Bloomberg News. I'm David Gura. This 35 00:02:06,760 --> 00:02:09,360 Speaker 1: is not your run of the mill corporate deal because 36 00:02:09,480 --> 00:02:11,919 Speaker 1: US Steel is not just any company. 37 00:02:12,280 --> 00:02:13,880 Speaker 3: It was the world's largest company. 38 00:02:14,200 --> 00:02:18,120 Speaker 1: That's Joe Doe, a Bloomberg Metals reporter. US Steel was 39 00:02:18,240 --> 00:02:21,120 Speaker 1: forged in nineteen oh one by a few names you 40 00:02:21,160 --> 00:02:25,160 Speaker 1: may have heard before, Andrew Carnegie, JP Morgan and Charles Schwab. 41 00:02:25,680 --> 00:02:27,560 Speaker 1: The metal it's made is a part of the United 42 00:02:27,639 --> 00:02:30,440 Speaker 1: Nations building, the New Orleans super Dome and the Chicago 43 00:02:30,480 --> 00:02:34,079 Speaker 1: Picasso sculpture. But its metal is used for more than 44 00:02:34,240 --> 00:02:35,119 Speaker 1: just landmarks. 45 00:02:35,440 --> 00:02:39,040 Speaker 3: Steel is ubiquitous. It is in everything. 46 00:02:39,440 --> 00:02:44,279 Speaker 1: Steel has kept pace with and anticipated the increasing needs. 47 00:02:43,960 --> 00:02:47,520 Speaker 3: Of the nation. Steel is in the roads, It's in 48 00:02:47,560 --> 00:02:50,920 Speaker 3: your refrigerator, houses like it's everywhere. 49 00:02:51,200 --> 00:02:54,359 Speaker 1: In any giant ladel of molten metal, there may be 50 00:02:54,480 --> 00:02:57,640 Speaker 1: steel that is destined to defeat time and distance, to 51 00:02:57,760 --> 00:02:59,799 Speaker 1: provide the framework of mighty buildings. 52 00:03:00,800 --> 00:03:02,919 Speaker 3: And so this was a company that, at one point 53 00:03:02,960 --> 00:03:07,120 Speaker 3: when we were a manufacturing based economy, was absolutely central 54 00:03:07,600 --> 00:03:11,440 Speaker 3: to everything. It was also part of the war machine 55 00:03:12,040 --> 00:03:15,440 Speaker 3: World War One, world War two. 56 00:03:14,639 --> 00:03:18,280 Speaker 1: In all hands main victory, and all hands must be 57 00:03:18,320 --> 00:03:20,639 Speaker 1: as relentless as the hands of all plots. 58 00:03:20,800 --> 00:03:25,000 Speaker 3: It employed a lot of people, but automation came around 59 00:03:25,600 --> 00:03:28,280 Speaker 3: in the seventies and eighties and people started to lose 60 00:03:28,280 --> 00:03:30,800 Speaker 3: their jobs. And talk to any of these steel workers 61 00:03:31,520 --> 00:03:34,680 Speaker 3: and they will tell you, yeah, I remember when they 62 00:03:34,720 --> 00:03:37,840 Speaker 3: brought a continuous cast into the plant and that was 63 00:03:37,840 --> 00:03:40,880 Speaker 3: fully automated, and we instantly lost a lot of jobs. 64 00:03:40,960 --> 00:03:42,480 Speaker 3: A lot of people who worked in the mills and 65 00:03:42,520 --> 00:03:45,160 Speaker 3: the furnaces for ages were no longer. 66 00:03:44,880 --> 00:03:49,040 Speaker 1: Needed automation to hit US steal particularly hard, the company 67 00:03:49,120 --> 00:03:52,640 Speaker 1: was slow to adopt new, more efficient technology. Plus, in 68 00:03:52,680 --> 00:03:56,240 Speaker 1: the last few decades, other countries like China have doubled 69 00:03:56,240 --> 00:04:00,200 Speaker 1: down on steel production and they've undercut the US on prices. 70 00:04:00,680 --> 00:04:04,560 Speaker 1: Joe says US Steel's approach put it at a competitive disadvantage. 71 00:04:04,760 --> 00:04:07,560 Speaker 3: These old blastphernace mills that have been around since the 72 00:04:07,720 --> 00:04:10,640 Speaker 3: day of Andrew Carnegie. They're slower. You can't turn them 73 00:04:10,640 --> 00:04:13,120 Speaker 3: on and off. You can't flip a switch if you 74 00:04:13,160 --> 00:04:15,840 Speaker 3: want to bring him down. There's a massive process behind that, and. 75 00:04:15,880 --> 00:04:19,680 Speaker 1: Pretty soon US Steel fell behind. By twenty fifteen, the 76 00:04:19,720 --> 00:04:22,880 Speaker 1: company was posting losses of more than a billion dollars 77 00:04:22,920 --> 00:04:27,040 Speaker 1: a year, and in twenty twenty, US Steel CEO made 78 00:04:27,040 --> 00:04:29,880 Speaker 1: a bold move. He spent a lot of money on 79 00:04:29,880 --> 00:04:32,760 Speaker 1: one of those new higher tech plants, the kind of 80 00:04:32,760 --> 00:04:35,560 Speaker 1: company can scale up or down quickly and uses a 81 00:04:35,600 --> 00:04:37,400 Speaker 1: process that doesn't pollute as much. 82 00:04:37,920 --> 00:04:40,240 Speaker 3: He paid a premium for it, and I remember at 83 00:04:40,240 --> 00:04:42,560 Speaker 3: the time when he bought it, many people in the 84 00:04:42,600 --> 00:04:45,520 Speaker 3: steel industry they'd laugh. They said, I cannot believe how 85 00:04:45,600 --> 00:04:49,760 Speaker 3: much they overpaid for this mill. But at its core, 86 00:04:50,960 --> 00:04:53,800 Speaker 3: what all these people said was it's kind of their 87 00:04:53,800 --> 00:04:57,039 Speaker 3: only option, because if not, you're still talking about a 88 00:04:57,080 --> 00:05:00,920 Speaker 3: company slowly marching toward it doom. 89 00:05:01,360 --> 00:05:04,360 Speaker 1: That big bet paid off. That mill became the crown 90 00:05:04,480 --> 00:05:07,200 Speaker 1: jewel of US Steel. It was a boon to its 91 00:05:07,200 --> 00:05:11,400 Speaker 1: bottom line, but it also introduced a new problem. Workers 92 00:05:11,440 --> 00:05:15,000 Speaker 1: at that new, higher tech plant weren't unionized, which posed 93 00:05:15,000 --> 00:05:17,680 Speaker 1: a threat to workers in those old school mills who 94 00:05:17,720 --> 00:05:20,880 Speaker 1: are members of the United steel Workers Union or the USW. 95 00:05:21,360 --> 00:05:25,000 Speaker 1: Non unionized labor at profitable US Steel plants weaken the 96 00:05:25,080 --> 00:05:28,839 Speaker 1: union's bargaining power. Those USW workers are the people Dave 97 00:05:28,920 --> 00:05:32,200 Speaker 1: McCall was representing at that tense meeting with Nippon Steel, 98 00:05:32,360 --> 00:05:35,520 Speaker 1: the company that wants to buy US Steel now. At 99 00:05:35,520 --> 00:05:37,839 Speaker 1: the time of that meeting, even though US Steel had 100 00:05:37,880 --> 00:05:40,320 Speaker 1: managed to pull itself out of the red thanks in 101 00:05:40,360 --> 00:05:42,359 Speaker 1: part to its decision to purchase that state of the 102 00:05:42,440 --> 00:05:46,320 Speaker 1: art mill, it still had long term capital concerns, which 103 00:05:46,360 --> 00:05:49,920 Speaker 1: made it interested in a merger. Nippon Steel announced its 104 00:05:49,920 --> 00:05:53,359 Speaker 1: bid in December. It offered to invest over a billion 105 00:05:53,440 --> 00:05:56,480 Speaker 1: dollars in the company and promised it would not idle 106 00:05:56,520 --> 00:05:58,640 Speaker 1: plants or have any immediate layoffs. 107 00:05:59,440 --> 00:06:01,279 Speaker 3: That announced and came out at six in the morning. 108 00:06:01,320 --> 00:06:04,280 Speaker 3: I spoke to Dave McCall just before six thirty am, 109 00:06:04,680 --> 00:06:09,040 Speaker 3: and you could sense a bit of surprise in his voice. 110 00:06:09,160 --> 00:06:11,279 Speaker 3: I think anybody could say, Yeah, if you work at 111 00:06:11,320 --> 00:06:13,720 Speaker 3: a company and you find out some company you've never 112 00:06:13,760 --> 00:06:15,839 Speaker 3: heard of maybe is going to buy your company, you 113 00:06:15,920 --> 00:06:19,640 Speaker 3: might also just have questions like what does that mean 114 00:06:19,680 --> 00:06:22,520 Speaker 3: for me or my job? And that is like one 115 00:06:22,520 --> 00:06:24,640 Speaker 3: of the things that we've heard from not just Stable Call, 116 00:06:24,680 --> 00:06:26,160 Speaker 3: but the steel workers themselves, right. 117 00:06:26,839 --> 00:06:29,400 Speaker 1: One of those workers is Rob Hutchison. He's been a 118 00:06:29,480 --> 00:06:32,799 Speaker 1: USW member for the last twenty eight years. Joe recently 119 00:06:32,839 --> 00:06:35,680 Speaker 1: caught up with him in Pittsburgh. Of course, everybody's worried 120 00:06:35,720 --> 00:06:39,200 Speaker 1: about their job, their future, their community, the iconic name 121 00:06:39,240 --> 00:06:42,279 Speaker 1: of the US still being lost. Hutchison told Joe this 122 00:06:42,400 --> 00:06:45,360 Speaker 1: isn't just about being blindsided by the news that their 123 00:06:45,400 --> 00:06:48,560 Speaker 1: company is being sold and sold to an international company. 124 00:06:48,600 --> 00:06:52,200 Speaker 1: They didn't even know his bidding. He's also concerned about security. 125 00:06:52,480 --> 00:06:55,560 Speaker 1: Security He and other workers don't believe they'd get with 126 00:06:55,680 --> 00:06:59,440 Speaker 1: this current offer. What kind of investments is upon actually 127 00:06:59,480 --> 00:07:01,919 Speaker 1: going to meg are they going to live up to 128 00:07:01,960 --> 00:07:06,600 Speaker 1: their promises which have been pretty vague at this point. 129 00:07:06,720 --> 00:07:08,760 Speaker 3: It's not just saying you're going to invest one point 130 00:07:08,839 --> 00:07:12,000 Speaker 3: four billion dollars. It is love that one point four 131 00:07:12,040 --> 00:07:14,720 Speaker 3: billion dollars. We're going to invest X number of millions 132 00:07:14,760 --> 00:07:18,240 Speaker 3: of dollars to the mills that are unionized work. You 133 00:07:18,400 --> 00:07:22,080 Speaker 3: need some assurances that go beyond just save half of 134 00:07:22,120 --> 00:07:22,560 Speaker 3: the mills. 135 00:07:23,640 --> 00:07:25,440 Speaker 2: Right now. There's sort of like two sides of the 136 00:07:25,480 --> 00:07:27,240 Speaker 2: coin to us Steel. 137 00:07:27,080 --> 00:07:28,800 Speaker 1: White House reporter Josh Wingrove. 138 00:07:28,920 --> 00:07:33,480 Speaker 2: One is this new, modern, more efficient plant, the Crown Jewel, 139 00:07:33,880 --> 00:07:38,400 Speaker 2: and the others are the older, more hallowed, unionized blast 140 00:07:38,440 --> 00:07:40,600 Speaker 2: furnaces that have a lot more political clout. 141 00:07:40,920 --> 00:07:44,200 Speaker 1: For Marey, that Crown Jewel is what his company wants, 142 00:07:44,680 --> 00:07:46,600 Speaker 1: but he can't get his hands on it without the 143 00:07:46,640 --> 00:07:49,560 Speaker 1: backing of the union, which represents the other part of 144 00:07:49,600 --> 00:07:50,120 Speaker 1: the company. 145 00:07:50,440 --> 00:07:52,520 Speaker 2: To a lot of people, this deal is no brainer. 146 00:07:53,240 --> 00:07:56,800 Speaker 2: It is a sale to an allied country's company. A 147 00:07:56,800 --> 00:07:59,320 Speaker 2: lot of people thought this would sail through, including it 148 00:07:59,400 --> 00:08:01,480 Speaker 2: seems the buyer. 149 00:08:01,280 --> 00:08:04,440 Speaker 1: But McCall and the union rejected the deal in part 150 00:08:04,480 --> 00:08:08,080 Speaker 1: because the bid didn't specify which jobs Nippon Steel would 151 00:08:08,160 --> 00:08:12,200 Speaker 1: keep whether the deal would protect union work. McCall also 152 00:08:12,200 --> 00:08:15,720 Speaker 1: said Nippon Steele should have consulted the USW sooner, but 153 00:08:15,840 --> 00:08:18,560 Speaker 1: the union had been backing a rival bid from an 154 00:08:18,600 --> 00:08:19,520 Speaker 1: American company. 155 00:08:20,120 --> 00:08:23,080 Speaker 2: Nippon Steele said it couldn't rope the union in to 156 00:08:23,200 --> 00:08:25,800 Speaker 2: its own bid. It would be showing its hand to 157 00:08:26,040 --> 00:08:29,120 Speaker 2: an ally of a competitor. The union walked out politely. 158 00:08:29,200 --> 00:08:32,800 Speaker 2: They didn't like storm out, but the union wasn't satisfied. 159 00:08:33,200 --> 00:08:36,520 Speaker 1: US Steel and Nippon Steele gave Bloomberg a joint statement 160 00:08:36,720 --> 00:08:39,960 Speaker 1: which said, in part, we are confident that our partnership 161 00:08:39,960 --> 00:08:43,240 Speaker 1: will protect and grow US Steel. The deal will protect jobs, 162 00:08:43,440 --> 00:08:46,840 Speaker 1: strengthen American supply chains, and enhance the competitiveness of the 163 00:08:46,920 --> 00:08:50,480 Speaker 1: US economy, all while building resilience against threats from China. 164 00:08:51,080 --> 00:08:54,640 Speaker 1: US Steel's headquarters will remain in Pittsburgh, and its products, 165 00:08:54,720 --> 00:08:58,920 Speaker 1: supported by significant capital investments and technology sharing from Nippon Steel, 166 00:08:59,160 --> 00:09:03,400 Speaker 1: will remain mind melted and made in America. One week 167 00:09:03,480 --> 00:09:06,840 Speaker 1: after the meeting, President Biden released his own statement, which 168 00:09:07,120 --> 00:09:08,280 Speaker 1: was pretty extraordinary. 169 00:09:08,400 --> 00:09:12,120 Speaker 2: They called explicitly for US deal to be American owned, 170 00:09:12,160 --> 00:09:14,520 Speaker 2: an American run. It went farther than a lot of 171 00:09:14,520 --> 00:09:15,480 Speaker 2: people thought it. 172 00:09:15,480 --> 00:09:19,640 Speaker 1: Would, essentially because the union opposed the deal. President Biden 173 00:09:19,720 --> 00:09:20,160 Speaker 1: did too. 174 00:09:21,160 --> 00:09:25,080 Speaker 3: A president weighing in on a deal in the first 175 00:09:25,120 --> 00:09:29,160 Speaker 3: place is huge, and then weighing in on like a 176 00:09:29,240 --> 00:09:31,640 Speaker 3: steel deal is like next level. 177 00:09:32,160 --> 00:09:34,400 Speaker 1: Why Joe Biden weighed in on a steel deal at all, 178 00:09:34,640 --> 00:09:36,640 Speaker 1: what his support of the union means for the future 179 00:09:36,679 --> 00:09:39,600 Speaker 1: of US Steel, and how all this could figure into 180 00:09:39,640 --> 00:09:49,360 Speaker 1: the twenty twenty four election. After the break, we're back. 181 00:09:49,920 --> 00:09:52,440 Speaker 1: After the head of the United steel Workers' Union rejected 182 00:09:52,520 --> 00:09:56,280 Speaker 1: Nippon Steel's offer to take over US Steel, President Biden 183 00:09:56,320 --> 00:09:59,040 Speaker 1: stepped in to say he had the union's back. Here's 184 00:09:59,120 --> 00:10:00,760 Speaker 1: Josh Wingrove on why. 185 00:10:01,120 --> 00:10:04,439 Speaker 2: Joe Biden has spent the last four years courting unions. 186 00:10:04,880 --> 00:10:08,760 Speaker 2: Biden is from Scranton, Pennsylvania. His dad moved their family 187 00:10:09,360 --> 00:10:13,559 Speaker 2: to Claimont, Delaware, just outside of Philadelphia. The steel industry, 188 00:10:14,600 --> 00:10:19,040 Speaker 2: Pennsylvania steel industry union jobs. I mean, this colors every 189 00:10:19,040 --> 00:10:22,440 Speaker 2: speech this guy gives. It is the entire lens of 190 00:10:22,559 --> 00:10:24,520 Speaker 2: Joe Biden and his you on the economy. 191 00:10:24,880 --> 00:10:28,120 Speaker 1: In a sense, it's not surprising President Biden would weigh 192 00:10:28,160 --> 00:10:30,280 Speaker 1: in on this deal that he would throw his support 193 00:10:30,320 --> 00:10:34,080 Speaker 1: behind the USW even if presidents are largely reluctant to 194 00:10:34,160 --> 00:10:37,280 Speaker 1: weigh in on corporate takeovers, and his decision to back 195 00:10:37,320 --> 00:10:40,480 Speaker 1: the union paid off. Within a few weeks, the United 196 00:10:40,480 --> 00:10:43,720 Speaker 1: steel Workers Union endorsed Biden's re election campaign. 197 00:10:44,120 --> 00:10:47,960 Speaker 2: The union leadership are essentially unanimous. The question is will 198 00:10:48,000 --> 00:10:51,360 Speaker 2: their members follow them. Quite clearly, a lot of union 199 00:10:51,360 --> 00:10:52,600 Speaker 2: members like Donald Trump. 200 00:10:53,559 --> 00:10:57,080 Speaker 1: That's because while Biden has branded himself as Union Joe, 201 00:10:57,600 --> 00:11:01,599 Speaker 1: it's impossible to talk about US manufacs rise to prominence 202 00:11:01,880 --> 00:11:05,680 Speaker 1: without talking about Donald Trump. With his make America Great 203 00:11:05,679 --> 00:11:09,280 Speaker 1: Again slogan, Trump is appealing to nostalgia for a time 204 00:11:09,280 --> 00:11:14,120 Speaker 1: when American manufacturing reigned supreme, US Steel's golden era. When 205 00:11:14,120 --> 00:11:16,960 Speaker 1: he ran for president in twenty sixteen, Trump said he 206 00:11:16,960 --> 00:11:19,720 Speaker 1: would prop up the struggling US steel industry. 207 00:11:19,920 --> 00:11:23,200 Speaker 2: These are blue collar workers. Trump is speaking to them, 208 00:11:23,520 --> 00:11:25,800 Speaker 2: and he flipped a lot of these important states in 209 00:11:25,840 --> 00:11:27,400 Speaker 2: twenty sixteen by speaking to them. 210 00:11:27,440 --> 00:11:30,720 Speaker 1: Two years later, as president, he made good on that promise. 211 00:11:31,000 --> 00:11:35,000 Speaker 1: Trump imposed a twenty five percent tariff on steel imports, 212 00:11:35,240 --> 00:11:36,800 Speaker 1: which was a radical move. 213 00:11:36,960 --> 00:11:42,079 Speaker 2: The tariffs caused a mess. Everyone, including allied countries, lost 214 00:11:42,120 --> 00:11:46,920 Speaker 2: their minds over that, but they were successful in reshaping 215 00:11:46,960 --> 00:11:51,360 Speaker 2: the domestic steel industry, and right now those tariffs remain 216 00:11:51,400 --> 00:11:54,520 Speaker 2: in place because there's bipartisan agreement on them. Democrats and 217 00:11:54,559 --> 00:11:55,680 Speaker 2: Republicans think they. 218 00:11:55,559 --> 00:11:58,679 Speaker 1: Work, which brings us back to Union Joe and his 219 00:11:58,720 --> 00:12:02,880 Speaker 1: own nostalgia based ten line build back better. The steel 220 00:12:02,880 --> 00:12:05,440 Speaker 1: industry is one of very few issues where there is 221 00:12:05,559 --> 00:12:08,559 Speaker 1: common ground among Republicans and Democrats. 222 00:12:08,840 --> 00:12:11,560 Speaker 2: On the issue of protecting steel. Trump and Biden are 223 00:12:11,720 --> 00:12:15,640 Speaker 2: very close together. I mean it's difficult to distinguish their policies. 224 00:12:15,960 --> 00:12:18,560 Speaker 2: The direction is one way on this, and that is 225 00:12:18,640 --> 00:12:21,480 Speaker 2: more protectionism for the American steel industry. 226 00:12:21,360 --> 00:12:25,679 Speaker 1: And keeping US Steel American owned has important symbolism, which 227 00:12:25,720 --> 00:12:28,720 Speaker 1: makes a Japanese takeover of US Steel in twenty twenty 228 00:12:28,760 --> 00:12:32,560 Speaker 1: four very tricky because what might be best for US 229 00:12:32,600 --> 00:12:36,079 Speaker 1: Steel Corporation's bottom line being bought out by a Japanese 230 00:12:36,080 --> 00:12:39,360 Speaker 1: company is not what its union wants or what either 231 00:12:39,480 --> 00:12:41,199 Speaker 1: leading presidential candidate wants. 232 00:12:41,600 --> 00:12:44,160 Speaker 2: The question is shifted a little bit from who should 233 00:12:44,160 --> 00:12:47,120 Speaker 2: own US Steel to what's the best outcome for the 234 00:12:47,200 --> 00:12:48,199 Speaker 2: United steel Workers. 235 00:12:48,720 --> 00:12:51,439 Speaker 1: Both Biden and Trump have spoken out against this steal, 236 00:12:51,600 --> 00:12:55,360 Speaker 1: but Josh Wingrove says that raises another question neither candidate 237 00:12:55,400 --> 00:12:56,359 Speaker 1: has answered. 238 00:12:56,600 --> 00:12:57,720 Speaker 2: What would be a better option. 239 00:12:58,120 --> 00:13:01,720 Speaker 1: There are a few different ways this could go. One 240 00:13:01,960 --> 00:13:05,240 Speaker 1: the deal does not happen and US Steel remains independent, 241 00:13:05,720 --> 00:13:08,080 Speaker 1: but that might mean the company run short of capital 242 00:13:08,280 --> 00:13:12,360 Speaker 1: and workers could still end up losing their jobs. Option two, 243 00:13:12,720 --> 00:13:15,800 Speaker 1: the takeover does happen, but then the union won't be happy. 244 00:13:16,480 --> 00:13:20,120 Speaker 1: Option three. US Steel gets bought by another company or 245 00:13:20,120 --> 00:13:23,520 Speaker 1: a combination of other companies. But the other highest bidder, 246 00:13:23,679 --> 00:13:26,640 Speaker 1: the one backed by the union, is another US steelmaker 247 00:13:26,760 --> 00:13:30,640 Speaker 1: named Cleveland Cliffs. Cleveland Cliff's bid would likely be lower, 248 00:13:30,760 --> 00:13:33,439 Speaker 1: and it would give the company a monopoly over domestic 249 00:13:33,520 --> 00:13:37,840 Speaker 1: iron ore reserves and a dominant share of coveted automotive steel. 250 00:13:38,160 --> 00:13:41,120 Speaker 2: Then you create any trust concerns, and if I was 251 00:13:41,200 --> 00:13:44,760 Speaker 2: ranking the top two things that Joe Biden focuses on 252 00:13:46,080 --> 00:13:51,040 Speaker 2: in managing the economy, it's probably unions and anti monopoly efforts. 253 00:13:51,559 --> 00:13:54,600 Speaker 1: It's unclear where this deal goes from here. Even if 254 00:13:54,600 --> 00:13:56,800 Speaker 1: it does go through, it could get tied up in 255 00:13:56,960 --> 00:14:01,959 Speaker 1: legal and regulatory maneuverings, including by President Biden, whose administration 256 00:14:02,080 --> 00:14:04,640 Speaker 1: is reviewing the deal to confirm there were no security 257 00:14:04,679 --> 00:14:07,600 Speaker 1: concerns from this foreign investment in a US company. 258 00:14:07,960 --> 00:14:11,120 Speaker 2: Joe Biden almost certainly cannot win the presidency again if 259 00:14:11,120 --> 00:14:14,000 Speaker 2: he loses Pennsylvania. There are a lot of swing states, 260 00:14:14,040 --> 00:14:17,840 Speaker 2: but this is for him crucial. It is a big state, 261 00:14:17,880 --> 00:14:20,640 Speaker 2: it has a lot of Electoral College votes, it's his 262 00:14:20,720 --> 00:14:25,600 Speaker 2: home state demographically. If he loses Pennsylvania, he's probably losing. 263 00:14:25,920 --> 00:14:29,400 Speaker 2: Similarly for Trump, if he can steal away Pennsylvania, his 264 00:14:29,480 --> 00:14:33,400 Speaker 2: odds of winning go through the roof. So Pennsylvania is 265 00:14:33,400 --> 00:14:35,920 Speaker 2: the ballgame in some ways, and that's why we're seeing 266 00:14:35,920 --> 00:14:36,800 Speaker 2: such focus on this. 267 00:14:37,440 --> 00:14:40,200 Speaker 1: So Josh thinks it's likely a decision on the deal 268 00:14:40,640 --> 00:14:43,160 Speaker 1: just slides until after the election. 269 00:14:44,200 --> 00:14:48,640 Speaker 2: It's really messy. It's just a no win situation, and 270 00:14:48,680 --> 00:14:51,880 Speaker 2: the administration has a lot of leeway to stop start, 271 00:14:52,240 --> 00:14:56,200 Speaker 2: you know, pause the clock, review this review that they 272 00:14:56,240 --> 00:14:57,760 Speaker 2: can really delay things. 273 00:14:58,160 --> 00:15:01,359 Speaker 1: But slowing down this deal is also risky. 274 00:15:01,320 --> 00:15:04,520 Speaker 2: Because if it collapses, that might not be good for 275 00:15:04,640 --> 00:15:06,800 Speaker 2: US steel and it might not be good for the 276 00:15:06,840 --> 00:15:09,600 Speaker 2: steel workers. And if it's bad for the steel workers, 277 00:15:09,960 --> 00:15:12,600 Speaker 2: then all the politics that are hanging over this deal 278 00:15:13,160 --> 00:15:16,600 Speaker 2: flare up again and the question will be who helped 279 00:15:16,680 --> 00:15:20,360 Speaker 2: kill this deal and why? If people eventually blame whatever 280 00:15:20,400 --> 00:15:24,120 Speaker 2: is about to happen for them losing a shift, or 281 00:15:24,200 --> 00:15:26,560 Speaker 2: losing a job, or closing a plan. 282 00:15:29,840 --> 00:15:32,720 Speaker 1: Thanks for listening to The Big Take podcast from Bloomberg News. 283 00:15:32,840 --> 00:15:36,200 Speaker 1: I'm David Gura. This episode was produced by Julia Press. 284 00:15:36,360 --> 00:15:38,960 Speaker 1: It was mixed by Ben O'Brien. It was fact checked 285 00:15:38,960 --> 00:15:42,840 Speaker 1: by Adriana Tapia Zafra. Naomi Shaven is our senior producer. 286 00:15:43,080 --> 00:15:46,760 Speaker 1: It was edited by Aaron Edwards, Millie Moonshee, and Michael Shepherd, 287 00:15:46,920 --> 00:15:50,960 Speaker 1: who provides editorial direction with Wendy Benjaminson and Elizabeth Ponso. 288 00:15:51,440 --> 00:15:54,640 Speaker 1: Nicole Biemster Boor is our executive producer. Sage Bauman is 289 00:15:54,680 --> 00:15:58,280 Speaker 1: Bloomberg's head of Podcasts. Thanks for listening. We'll be back 290 00:15:58,280 --> 00:15:58,720 Speaker 1: next week.