[ZTWsquared]

2001 ZTS,Mar 8 2009, 03:57 PM Wrote:I'll agree with you that by appearance it was politically driven but remain of the opinion that in the end it was ultimately the all mighty dollar. Now possibly, it is political in the "where that dollar may come from down the road sense". No business decision is ever made for anything other than money and in fact nothing is ever done unless a 10% return on investment is pretty much a sure thing.

The steel business has just been so up-ended the last two years and the last quarter of 2008 especially. China changed everything.

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Great conversation by the way! This place has always been pretty cool and more than just something to do with a car.

What a diverse bunch we are and what a pethora of knowledge we collectively possess.
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Agreed 100% on the last two points ... and actually I think our arguments are converging in terms of your first point.

I didn't mean for a moment to suggest that money wasn't the final arbiter ... my argument is more about the source of the revenue and the nature of the business decisions made to ensure access to it.

In an era where "normal" revenue streams are shrinking, a company like US Steel is undoubtedly looking to get as big a piece of the US stimulus pie as possible ... and so, in an environment infused with protectionist attitudes, the executives are forced to make decisions about closings with an eye on the demeanor of the US Congress and Senate and include such factors as the political consequences of laying off American workers at the same time as lobbying for big stimulus funded projects.

Think about it ... from an American perspective it makes far more sense to close a Canadian plant because it would have zero impact on any political considerations of gaining access to stimulus revenue ... and, again if I was on their PR team, one could argue that it would be the more humane decision because the Canadian worker is supported by a far more robust social safety net.

It could also be argued that, despite the greater efficiency and profitability of the Canadian operation, the overall health of the company short-term is heavily reliant on US stimulus-based revenue and therefore it is also in the long-term interest of the Canadian operations to in fact have them closed down instead of the American operations.

One could argue that this is in fact a business decision regardless of the intrusion of US politics in the marketplace - and it is an argument no one could win because to some degree it is a matter of semantics.

The sad truth is that in a time of reduced business some elements of the US Steel operation in NA had to close. In the absence of the protectionism in the US, the American political sensitivity to any job loss, and the availability of hundreds of billions of $ in stimulus money, I maintain US Steel would have made a different decision as to which plant to close.

I'm standing by to be corrected, but nothing I've seen so far changes my opinion. Of course if US Steel calls tomorrow and asks me to join their communications strategy team I'll be singing a different tune on Tuesday.