Business

Storied US Steel To Be Acquired For More Than $14 Billion By Nippon Steel

Published

1 year ago

2023-12-18

Kiara Grace

Storied US Steel To Be Acquired For More Than $14 Billion By Nippon Steel

Nippon Steel is acquiring U.S. Steel, a Pittsburgh steel manufacturer that played a significant part in the nation’s industrialization, in an all-cash deal worth around $14.1 billion.

The transaction is valued at around $14.9 billion when debt is assumed. According to World Steel Association projections for 2022, the combined company will be among the top three steel-producing companies in the world.

The price for U.S. Steel is roughly double what Cleveland Cliffs offered just four months ago. U.S. Steel, which turned down that bid, verified Nippon’s offered price early Monday.

That merger would have resulted in one of the top four producers outside China, which dominates global output. On Monday, executives from U.S. Steel were quizzed about a potential backlash from U.S. regulators over security concerns.

Storied US Steel To Be Acquired For More Than $14 Billion By Nippon Steel

“This is going to increase competition here in the United States with a great ally of the United States,” U.S. Steel CEO David Burritt responded. “It’s a great fit, and we don’t see it as a high-risk factor.” The risk is modest.

The company’s name and headquarters will remain in Pittsburgh, which was founded in 1901 by J.P. Morgan and Andrew Carnegie. It will become a Nippon subsidiary.

China and Chinese firms have dominated world production. According to the World Steel Association, China produces over 54% of the nearly 2 billion metric tons of steel globally annually.

In 2021, China’s Baowu Group, a state-owned iron business in Shanghai, will produce almost 120 million metric tons of steel. The United Nippon and U.S. firms will manufacture less than 90 million metric tons of steel, with Nippon producing most of that.

2022 the United States Steel Corporation will produce approximately 14.5 million tons.

The United States currently ranks fourth, trailing China, India, and Japan, and U.S. Steel’s blast furnace steel factories are among the most expensive to operate compared to more modern facilities that melt trash using arc furnaces.

However, U.S. steel factories with blast furnaces remain vital to U.S. manufacturing, particularly cars.

In anticipation of weaker steel demand, U.S. Steel idled one of its blast furnaces in Granite City, Illinois, earlier this year, citing a Detroit automakers’ strike.

Rising costs have pushed the sector’s consolidation this decade. Steel prices nearly doubled around the onset of the epidemic, reaching nearly $2,000 per metric ton by the summer of 2021 as supply networks became clogged, a symptom of growing demand for products and a failure to anticipate that demand.

On Monday, Nippon, which will pay $55 per share for U.S. Steel, stated that the acquisition will strengthen its manufacturing and technical capabilities. It will also increase Nippon’s production in the United States and strengthen its standing in Japan, India, and the ASEAN area.

Nippon stated that the acquisition will increase its total annual crude steel capacity to 86 million tons, allowing it to capitalize on rising demand for high-grade, automotive, and electrical steel.

“We are committed to honoring all of U.S. Steel’s existing union contracts,” Nippon President Eiji Hashimoto said in a prepared statement.

U.S. Steel CEO David Burritt said the transaction benefits the U.S. by “ensuring a competitive, domestic steel industry while strengthening our global presence.” During a conference call on Monday, he stated that the business will continue to run its mining and steel activities in the United States for domestic customers.

Nippon announced on Monday that it will uphold all collective bargaining agreements with the United Steelworkers and other employees and is dedicated to maintaining its connection with workers. Nippon has been present in the United States for nearly four decades, beginning with a joint venture with Wheeling-Pittsburgh in 1984, which later became a wholly-owned subsidiary.

The United Steelworkers International, on the other hand, instantly opposed the agreement.

The union “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,” said David McCall, president of United Steelworkers.

McCall stated that U.S. Steel and Nippon Steel did not contact the union about the agreement and that the union intends to use all of the provisions in its agreements to defend jobs.

“We also will strongly urge government regulators to carefully scrutinize this acquisition and determine if the proposed transaction serves the national security interests of the United States and benefits workers,” he said.

Since its inception in the early twentieth century, U.S. Steel has been a symbol of industrialization, and the domestic steel industry reigned globally before Japan and, later China became the main steelmakers over the last 40 years.

The corporation survived the Great Depression and contributed significantly to the United States’ efforts in World Wars I and II, delivering hundreds of millions of tons of steel for planes, ships, tanks, and other military equipment and steel for automobiles and appliances.

During the late 1970s and early 1980s, U.S. Steel curtailed output and sold off many other operations due to an energy crisis and successive recessions. With oversupply and a flood of lower-cost steel imports pulling down prices into the new century, the corporation reorganized in 2001 and spun off its oil division, which formed Marathon Oil Corp.

Storied US Steel To Be Acquired For More Than $14 Billion By Nippon Steel

The 64-story U.S. Steel Tower still dominates the Pittsburgh skyline, although U.S. Steel is no longer its primary tenant. That is UPMC, a local health system whose name is now emblazoned on the top of the tower.

The boards of both companies have approved the deal, and it should close in the second or third quarter of 2024. It still needs to be approved by U.S. Steel shareholders.

United States Steel Corp.’s stock jumped more than 27% on Monday.

SOURCE – (AP)

Business

Chinese Automaker BYD Slams Reports That Factory Conditions Are Poor In Brazil

Published

6 hours ago

2024-12-26

Salman Ahmad

(AP Photo/Ng Han Guan, File)

(VOR News) – BYD, the Chinese manufacturer, has released a statement addressing concerns concerning adverse conditions at a construction site in Brazil where the business is building a facility.

The assertion claims that the accusations aim to “discredit” China and its enterprises. At the week’s outset, a task force led by Brazilian prosecutors declared the rescue of 163 Chinese people subjected to conditions akin to slavery at the location.

The Labor Prosecutor’s Office recorded a video of the workers’ dormitories, which displayed beds lacking mattresses and rudimentary kitchen facilities.

BYD spokeswoman Li Yunfei strongly opposed the issue on Weibo.

The statement additionally condemned the media’s portrayal of the incident. “The statement indicated that foreign entities are intentionally maligning Chinese brands, disparaging China, and seeking to jeopardize the relationship between China and Brazil.”

BYD, an acronym for “Build Your Dreams,” is a prominent maker of electric automobiles globally. On Monday evening, the corporation declared its intention to “immediately terminate the contract” with the Jinjiang Group, the contractor responsible for the factory’s construction, and stated that it was “evaluating other suitable measures…”

BYD announced that the employees at Jinjiang will be accommodated in nearby hotels temporarily and that they will not suffer negative consequences from the decision to halt operations at their workplace.

The corporation announced that it had been altering the working conditions at the construction site in recent weeks and had notified its contractors that “adjustments” were necessary.

Li’s tweet on Weibo included what it said to be a “declaration” from the Chinese workers at the site. The tweet included a video depicting individuals seated together in a room. The men’s thumbprints were crimson.

The video depicted a worker articulating a statement asserting that allegations of impoverished and “slave-like” conditions violated their human rights and that these difficulties stemmed from misunderstandings.

BYD should continue our employment here.”

Upon completing his work, the employees applauded. Prosecutors asserted that the sanitation conditions at BYD’s site were notably inadequate. There was one toilet for every 31 workers, necessitating their rise at four in the morning to line up and be prepared for work by five thirty.

Brazilian law defines conditions akin to slavery as defined by the worker’s subjugation to coerced labor or excessive working hours, acceptance of deplorable working conditions, and limitations on the worker’s freedom of movement.

Brazilian officials reported that Jinjiang Construction Brazil confiscated the workers’ passports and retained sixty percent of their wages, in addition to the substandard living conditions imposed on the workers.

The labor office’s statement indicates that employees who resign must reimburse the corporation for their travel expenses to China and return ticket costs.

The employees’ statement indicates that the passports were taken to enable the corporation to file work permits and other procedures that the employees could not accomplish independently due to language barriers.

Jinjiang Construction Brazil has reported that it is undergoing “frequent and intensive inspections by the BYD local labor department in Brazil.”

The labor department’s disclosed information was characterized as false, particularly the claims that the Jinjiang laborers were ‘enslaved’ and ‘rescued,’ which are entirely contradictory to the facts. This arose from cultural disparities, BYD translation difficulties, and comprehension difficulties regarding the content.

A declaration was issued asserting that the staff were enthusiastic about engaging with the media on the topic.

In numerous regions of the developing globe, the living conditions of migrant construction workers might be exceedingly inadequate. Moreover, such labor occasionally entails contracts that compel workers to reimburse BYD substantial sums of money expended to secure their positions, despite legal prohibitions against such agreements.

SOURCE: AP

Business

Walmart Charged With Unlawfully Establishing Bank Accounts for 1 Million Drivers

Published

2 days ago

2024-12-24

Salman Ahmad

Photo: Reuters

(VOR News) – The Consumer Financial Protection Bureau (CFPB) filed a lawsuit against Walmart and a fintech company called Branch Messenger, alleging that the two companies forced more than a million delivery workers to use costly bank accounts to receive their paychecks. Both of these companies were the targets of the lawsuit.

According to the action filed by the Consumer Financial Protection Bureau (CFPB), Walmart and Branch are accused of opening deposit accounts for Walmart’s Spark Drivers, who are considered independent contractors, without first getting their consent.

These bank accounts contained drivers’ personal data, including their Social Security numbers.

The lawsuit specifically claims that Walmart’s drivers, who are in charge of delivering goods from the company’s warehouses to consumers, are only allowed to have their earnings transferred into these branch accounts.

This goes against the company’s rules, which permit them to move their earnings to different accounts.

Walmart reportedly told employees in 2021 that using these accounts may lead to firing.

Additionally, the lawsuit claimed that accessing profits through the accounts was a “complex process,” typically causing weeks-long delays. Among the other accusations that were made was this one.

This was the predicament they ultimately found themselves in, even though the business had assured them that they would have prompt access to funds.

To make matters worse, according to the Consumer Financial Protection Bureau (CFPB), drivers allegedly paid ten million dollars in “junk fees” to move their earnings to different bank accounts.

Director of the Consumer Financial Protection Bureau (CFPB), Rohit Chopra, said, “Companies cannot force workers into getting paid through accounts that drain their earnings with junk fees,” in his criticism of the practice. “Junk fees are a waste of money.”

This case’s next section outlined the traits of the average Spark Driver: “in addition to being a woman, having children, not having a college degree, and having a low income.”

Walmart denied the accusations made by the Consumer Financial Protection Bureau (CFPB) and stated in a statement that it will firmly defend itself in court.

Walmart released a statement claiming that the Consumer Financial Protection Bureau’s (CFPB) hurried lawsuit is full of factual errors, exaggerations, and blatant misrepresentations of basic legal principles.

The Consumer Financial Protection Bureau (CFPB) never gave Walmart a chance to make its case in an unbiased way throughout its rushed probe. In contrast to the Consumer Financial Protection Bureau, we are ready to fiercely defend the Company before a court that respects the due process of law principle.

Additionally, Branch was charged by the Consumer Financial Protection Bureau (CFPB) with engaging in deceptive advertising and neglecting to look into and address issues pertaining to the accounts. In addition to earlier accusations, these were also made.

In contrast, Branch denied the accusations and defended its services, saying, “The Consumer Financial Protection Bureau rushed to file a lawsuit despite the company’s extensive cooperation with its investigation, refusing to engage with Branch in any meaningful way about this matter.”

Branch responded to the Walmart accusations with a statement.

Furthermore, Branch claimed that the case was motivated more by a desire for “media attention” than by concerns for the welfare of the employees. This is what he stated in his statement.

This case, which is part of a larger campaign to give these gig workers more rights, targets these individuals who work for firms like Uber, Lyft, and DoorDash who are supposed to be independent contractors. It is considered that gig workers are independent contractors.

Earlier this month, the Consumer Financial Protection Bureau (CFPB) made claims against large financial firms, including Wells Fargo, Bank of America, and JPMorgan Chase.

According to the CFPB, these organizations did not stop fraud on the money-sending app Zelle, which is a platform that lets people send and receive money.

The choice of a new director may have an impact on the outcome of this lawsuit because President-elect Donald Trump is expected to choose a replacement for the present director of the Consumer Financial Protection Bureau (CFPB).

When Jaret Seiberg was employed as a financial services policy analyst at TD Cowen Washington Research Group, she noted that the new director’s strategy for handling such matters would be the deciding element in the case’s future course.

SOURCE: TN

Business

Naked Wines Issues 2024 Performance Review

Published

3 days ago

2024-12-24

Geoff Brown

Naked Wines claims to be in 'better position' despite falling sales

Naked Wines, an online retailer, has issued a performance review after announcing that sales declined 15% in the first half of the year to $112.3 million, despite management insisting it is in “a better position, both financially and strategically”.

Rodrigo Maza, who became CEO in February after joining the company as UK managing director in September 2023, stated that the company was in a better financial and strategic position, with “robust financial foundations” and committed and engaged members.

“Our strategic initiatives centred around customer acquisition and retention are generating learnings, and we are currently experiencing solid trading during the peak season period,” he told shareholders.

It also stated that a performance review is under underway in order to “proactively evaluate options to maximise shareholder value”. The end of the fiscal year will see the release of a report.

Naked Wines New CEO

He also welcomed new CFO Dominic Neary, who joined Naked Wines from Mind Gym in November, saying he was excited to collaborate with him “as we focus the business on cash, profitability, and growth with its rose wine and dry white wine.”A performance review is presently ongoing to “proactively evaluate options to maximise shareholder value,” according to the results, with a report expected to be released at the end of the fiscal year.

It also stated that it has continued to liquidate surplus inventory, with the UK and Australia returning to normal inventory levels, however US inventories remained “significantly” in excess, albeit being down $20.5 million from HY24.

It stated that it was “currently investigating options to reduce inventory levels more quickly,” which would help drive improved cash over the next two fiscal years, but “could lead to increased liquidation costs and result in EBIT at the lower end of guidance.”

Although active members (those with Angel or Wine Genie membership) declined 12% in the last 12 months, the statement noted retention of its ‘core’ members (those who had been customers for two years or more) was up two percentage points to 79%, and they remained “highly engaged”.

Customers’ total probability to refer the company to a friend (net promoter score) increased from 73 to 76 in the previous quarter, according to the report.

Turning Things Around

In August, the company reported a pre-tax loss of $16.3 million for the fiscal year ending 1 April 2024, up from $15 million in the fiscal year 2022/2023, with revenues down 18% to $290 million and repeat business down a quarter to $65 million.

Founder Rowan Gormley, on the other hand, asserted that the company was “making real progress in turning things around with its rose wine and dry white wine”.

It came after the engagement of debt consultants in March 2024 to look into refinancing possibilities and a possible wine company reorganization after the value of Naked Wines shares fell by about a third in the previous year.

Gormley increased his interest in Naked Wines significantly in December 2023, purchasing $9,600 in shares.

This was Gormley’s second round of stock purchases; he and other senior board members purchased a large number of shares in early November following a drop in share value after the firm stated it was lowering its full-year sales estimates to -12% to -16%.

Three of the company’s leaders at the time put a total of $94,000 in its stock.