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IPFS News Link • Economy - Economics USA

Inspired Idiot of the Week: Everyone Who Ruined the Sale of US Steel

•, by James Hickman

Through the consolidation of Carnegie Steel Company along with several other steel and iron businesses, they formed US Steel.

And it was immediately the world's first billion-dollar corporation.

But that was just the beginning. US Steel quickly became a symbol of American industrial might.

It played a crucial role in building the infrastructure of the United States, supplying steel for skyscrapers, bridges, automobiles, and railroads. During both World Wars, US Steel's production capacities were pivotal in supporting the Allied military efforts.

By the 1940s, there was hardly a more fitting icon of American prosperity.

But things slowly started to change.

After World War II, the economy globalized and trade flourished. US Steel suffered from increased competition from foreign steel producers, and then, in later years, a decline in the American manufacturing sector.

Slowly the company diminished to just a shadow of what it used to be.

The decline of US Steel culminated in a bidding war last year by larger rivals who were eager to absorb the company.

Another American steel producer named Cleveland-Cliffs offered to buy US Steel for roughly $7 billion.

But Japan-based Nippon Steel offered double the amount— $14.1 billion— and also promised to inject $1.4 billion in capital to upgrade US factories. Somewhat poetically, $1.4 billion was the exact original capitalization of US Steel back in 1901.

Naturally, US Steel accepted the higher offer. $1.4 billion in foreign investment would do a lot of good for the company, for the steel industry, and for the US economy.

You know how the people in charge always love to talk about manufacturing jobs? Well, a $1.4 billion foreign investment gets you a LOT of manufacturing jobs.