A group representing major automakers on Friday urged the White House to oppose any effort by steelmaker Cleveland-Cliffs to buy rival U.S. Steel, warning that a deal could result in anti-competitive pricing for vehicles.
“A consolidation of the two companies would also place 65 to 90% of steel used in vehicles under the control of a single company,” Alliance for Automotive Innovation CEO John Bozzella said in a letter, which was first reported by Reuters.
President Joe Biden said earlier this month that U.S. Steel, which has agreed to be bought by Japan’s Nippon Steel for $14.9 billion, must remain a domestically-owned U.S. firm. Cleveland-Cliffs has said it would consider another bid for U.S. Steel if the deal with Nippon Steel falls apart.
“If the administration has concerns about the Nippon Steel deal, it must seriously consider alternative outcomes,” said the letter from the group, which represents General Motors, Toyota Motor Corp, Volkswagen, Hyundai and others. “One option that should not be on the table is an arrangement that creates a market concentration of domestic steel production in a single company.”
The White House, Cleveland-Cliffs and U.S. Steel did not immediately comment on the letter.
A combination of U.S. Steel and Cleveland-Cliffs would control “100% of the domestic electrical steel (e-steel) needed for electric vehicle (EV) motors and EV production,” the automaker group said in its letter.
It warned that a deal could “drive up the cost of both steel and e-steel, and ultimately increase the cost of finished vehicles (including EVs) for American consumers.”
The group wrote Congress, the Federal Trade Commission and the U.S. Justice Department in October to raise its concerns about a tie-up, citing concerns about steel used to produce vehicle structural frames, automotive surface panels like doors, hoods and fenders, and EV motors.
Source: Reuters.com