Automakers oppose Cleveland-Cliffs push to buy U.S. Steel
Reuters
Published Oct 31, 2023 03:12PM ET
Updated Oct 31, 2023 05:03PM ET
By David Shepardson
WASHINGTON (Reuters) -A group representing major automakers on Tuesday said the industry opposes steelmaker Cleveland-Cliffs (NYSE:CLF)' proposed acquisition of U.S. Steel, saying it would increase auto industry costs and slow electric vehicle sales.
The Alliance for Automotive Innovation, representing General Motors (NYSE:GM), Toyota Motor (NYSE:TM), Volkswagen (ETR:VOWG_p), Hyundai (OTC:HYMTF) and other major automakers, in a letter to Congress and U.S. regulators cited the combined steel companies' dominant market share for steel used to produce vehicle structural frames, for automotive surface panels like doors, hoods and fenders, as well as steel used for electric vehicle (EV) motors.
The letter from Alliance for Automotive Innovation CEO John Bozzella said a merger would "increase costs across the industry for both materials and finished vehicles," and noted 100% of the metal for EV motors known as e-steel would be concentrated in the combined company.
"Without competition in the U.S. for the production of e-steel, automakers face an increase in the cost of materials which could ultimately increase the cost of finished EVs for customers," the letter to lawmakers said.
The letter, which was also sent to Federal Trade Commission chair Lina Khan and Justice Department Antitrust chief Jonathan Kanter, said the "government should examine the potential for anti-competitive pricing of materials used by steel-reliant automotive manufacturers."
Neither steel company immediately responded to requests for comment.
U.S. Steel in August rejected Cleveland-Cliff's proposed $7.25 billion price. Cleveland-Cliffs CEO Lourenco Goncalves last week during an earnings call declined to discuss the issue, citing restrictions.
In August, U.S. Steel said it had entered into confidentiality agreements with "numerous third parties" and started to review multiple unsolicited proposals ranging from partial acquisition to an entire buyout.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.