Utopia Talk / Politics / UK takes control of British Steel

murder Member	Sat Apr 12 15:40:39 UK takes control of British Steel under emergency powers The UK government is taking control of Chinese-owned British Steel after emergency legislation was rushed through Parliament in a single day. Business Secretary Jonathan Reynolds told MPs the government's likely next step would be to nationalise the Scunthorpe plant, which employs 2,700 people. But he said he was forced to seek emergency powers to prevent owners Jingye shutting down its two blast furnaces, which would have ended primary steel production in the UK. MPs and peers were called back from their Easter holidays to debate the legislation in an extremely rare Saturday sitting of both houses of Parliament. It has now received Royal Assent after being passed by the Commons and Lords. Read it here: http://www.bbc.com/news/articles/ckg17g39x41o
Seb Member	Sat Apr 12 16:42:46 Murder: As I mentioned in Sam's thread, the situation is super sus. Seems Jingye have basically been trying to deliberately run the plant down to irreversible shut down (you can't restart blast furnaces if they cool down) behind the govts back while the govt is negotiating with them to keep it going. Starting to look like their intent in buying British steel was deliberately to run out into the ground either to increase export market or even perhaps as part of Chinese foreign policy. When the govt realised it had not ordered coking and fuel, and then refused an offer for the UK to pay for coking and fuel, the govt rushed through the legislation. I imagine there will be follow on from this as it recasts Chinese cos as investors.
Sam Adams Member	Sat Apr 12 18:04:36 Ahh so the british government does want steel. Lol@seb. Wasnt it three days ago that you said losing steel was no big deal?
Seb Member	Sun Apr 13 00:48:49 Sam displaying his usual strong grasp of textual comprehension. I think the first thing I said is the govt should call their bluff and nationalise it. What I said was virgin steel production isn't that important for national security compared to the specialist steels industry which is largely fed by imports.
Seb Member	Sun Apr 13 00:50:33 Sam, just read some interesting stuff how exposure to lead explains racial differences in US education attainment. Ever get tested for lead levels?
jergul large member	Sun Apr 13 04:01:46 What is suspicious about buying up a competitor to shut it down? That is just normal business practice, though usually done by professional chop shops these days. But the government is free to expropriate the company using long established rules for compensation. Also as a trust building matter. Global rebalancing does require changes to capital flows. Is the UK a safe place to invest in? You just read about lead? I harp on that every decade or so. You should follow me :).
Seb Member	Sun Apr 13 04:24:18 Jergul: The bit where the sale was allowed and subsidised in the first place to keep it open. "But the government is free to expropriate the company using long established rules for compensation" Nah, bad faith actors should get fuck all. If they deem the plant has no value, the appropriate compensation is £1.
Seb Member	Sun Apr 13 04:26:38 RE lead, yes we all know about lead but I just came across a study that explicitly correlates exposure to lead as explaining the bulk of differences in educational attainment scores between regions and racial groups in the US. Yes it's obvious but also nice to have it set out.
jergul large member	Sun Apr 13 04:40:13 Seb Starting to see why Europe is a bad place to invest in? Buying up, then shutting down a competitor is an accepted practice. There is significant value to it not existing any more. But the compensation level can thankfully be decided through international arbitration, so their is recourse. It takes time and is a hassle.
Sam Adams Member	Sun Apr 13 07:56:27 http://x.com/OliLondonTV/status/1911345535522685009 Lol. Nothing you do on the defense side even matters. "Sam, just read some interesting stuff how exposure to lead explains racial differences in US education attainment." You come up with the wildest excuses for denying dna. Why do those same racial differences exist in all other countries, and all times... both pre and post lead.
williamthebastard Member	Sun Apr 13 08:09:27 The average IQ in the US just a few generations back was between 70 and 80. So all americans who have ancestors just a few generations back come from a lineage of clinical retards, which is hereditary and essentialist, according to ODDams.
Paramount Member	Sun Apr 13 08:20:39 So the British government is basically stealing someone elses property. First they, along with the EU, steals Russian property and assets and now they are coming for the Chinese. Why would foreign companies ever want to invest in the UK or in the EU ever again, when they risk having their property and assets stolen?
Seb Member	Sun Apr 13 10:03:42 Jergul: Buying out the competition with the intent to reduce supply and so competition is somewhat shady anti-competitive practice at the best of times. When you were given permission to bid for a strategic industry and received hundreds of millions in subsidies on the express provision to keep the plant open and operating, only to then try to engineer it's shutdown and divert subsidies over-seas, I don't really think there's much to complain about. Paramount: No, they'll get some compensation. The fair value of the plant. Bearing in mind they think the plant has no productive value.
Seb Member	Sun Apr 13 10:06:29 Sam: You don't matter much. You used to be a free citizen that had rights and a share in the power of the US through your democratic voice; but it's pretty clear you are on a path to being a 21st Century version of a villein. But hey you get to think you are better than black people. So that's a win.
Sam Adams Member	Sun Apr 13 10:52:08 Lol keep importing black people. See how that works out for you. Also its funny that you are whining about democracy while arresting people for saying "speak english". "and a share in the power of the US through your democratic voice" This is your mind being unable to detatch itself from government handouts/control. Power has little to do with governments/votes. Im 1 in 200 million federal voters. That is nearly meaningless. My power comes from my mind engineering things that make life easier, safer, etc. From making goog choices and building up a network of property friends and family who are competent and awesome. THAT is the real power of a free citizen. I can do what i need without incompetent clowns such as yourself interfering.
jergul large member	Sun Apr 13 10:57:22 Seb Reframing just shows how incredibly poor investment climate the West is. Way safer to invest, well, anywhere else. Outright confiscation is covered by binding international arbitration thankfully in ths case.
murder Member	Sun Apr 13 11:49:45 "Lol keep importing black people. See how that works out for you." It worked out great for the world's only superpower.
murder Member	Sun Apr 13 12:12:27 The US has more of the stuff Sam thinks Europe shouldn't want, and less of the stuff he thinks Europe should want ... and we've been running the world for decades.
Sam Adams Member	Sun Apr 13 12:23:36 Yet you can still learn from our mistakes.
murder Member	Sun Apr 13 12:27:42 "Nah, bad faith actors should get fuck all. If they deem the plant has no value, the appropriate compensation is £1." They are subversive actors. Their intent was to cripple the UK. If it wasn't, they would have sold the unproductive plant, not shut it down. They should get locked up. This is a good example of why the Chinese shouldn't be allowed to own anything anywhere. -
Seb Member	Sun Apr 13 13:10:10 Sam: "while arresting people for saying "speak english"." [Citation needed] "My power comes from my mind engineering things" Which doesn't matter a bit if the govt or someone who can rent it comes along and just takes it. And that's why you don't matter very much Sam. You are subject to a state that's dismantling rule of law and your rights. Jergul: You are absolutely fine investing in the UK. I'm not sure you can really call buying a facility with the intent to destroy it and pocket subsidies investment. Kind of the opposite really. Murder: "They are subversive actors" Possibly. Probably even. "This is a good example of why the Chinese shouldn't be allowed to own anything anywhere." Indeed and I think what's going to be interesting is to see how this effects the UK's openness to Chinese investors.
Sam Adams Member	Sun Apr 13 15:47:16 Lol you just said a few weeks ago that because of trump you should ally with china. Your opinions are very confused. "Which doesn't matter a bit if the govt or someone who can rent it comes along and just takes it." Indeed. Thats why i generally oppose socialists like you.
jergul large member	Sun Apr 13 16:27:22 Seb It is a common business practice. Fair enough that the UK does not want it shut down. You then pay to expropriate the company. Also a standard practice.
jergul large member	Sun Apr 13 16:33:46 Here is the company's perspective: http://bri...ill-and-steelmaking-operation/
Sam Adams Member	Sun Apr 13 19:37:54 Well i could certainly see that the business climate in ukland could be so unfavorable that a company would lose money, with so much incompetence around.
murder Member	Sun Apr 13 23:50:52 "Here is the company's perspective:" It sounds like British Steel is less than worthless. $0 should more than cover the sale. -
Paramount Member	Mon Apr 14 00:03:15 If it is worthless, why does the UK government want it?
murder Member	Mon Apr 14 00:46:51 National pride. -
Seb Member	Mon Apr 14 01:42:48 Sam: Again, your shitty comprehension is your problem. I didn't use the word "ally", I said "trade partner". Working together to facilitate trade and alternative to dollar / US based financial systems isn't the same as military alliance. Jergul: Then Jingye shouldn't have acted in bad faith by trying to buy a company it was allowed to bid for and accepted subsidies for to keep running, if its intent was to run it down. Play stupid games, win stupid prises.
Seb Member	Mon Apr 14 01:45:09 Murder: Jobs and supply chain. Also the govt reckons Jingye isn't being honest in its numbers.
Seb Member	Mon Apr 14 02:06:18 Jergul: The press release on consultations after being offered £500m plus govt paying for raw materials to keep negotiations open. It's rather strange, isn't it, that a defunct uneconomical plant can be worth nearly a billion to shut down. In the best case scenario for the company - taking your position - is that it's competitive but the market share is worth over a billion for Jingye to use subsidised Chinese production to cater to those markets. Which of course is not legitimate practice but trade distortion and can only work if the UK has no choice but to reduce tariffs and anti-dumping measures.
Seb Member	Mon Apr 14 02:07:54 Either the plant is worthless, of Jingye were trying to deliberately shut it down to favour its home market, having misappropriated previous subsidies. Take your pick.
jergul large member	Mon Apr 14 04:41:49 Or what the company said is true. The plant needed investment into new blast furnaces and the company was unwilling or unable to make that investment on its own. The sum value of new furnaces + existing assets far greater than the costs of new furnaces alone. The company is far more than its ability to produce raw steel. Otherwise it would not matter if it was shut down, for a new company could simply emerge in its place once funding was available. Any reason you might give for why intervening had to be done is also a reason that can be monetised into representing a company asset. I see no evidence of Jingye being a bad actor beyond what you might see from absolutely any multi national corporation.
jergul large member	Mon Apr 14 04:44:06 Capitalism 101. A corporation's loyalty is to its stockholders.
jergul large member	Mon Apr 14 04:45:19 Though, yes, this will thankfully be determined by binding international arbitration. Yay rule based systems.
Seb Member	Mon Apr 14 06:56:33 Jergul: "The plant needed investment into new blast furnaces and the company was unwilling or unable to make that investment on its own." This press release being issued *after* the UK had made it clear it was willing to subsidise the plant heavily, and even pay for the coke and ore needed to extend operations. It literally doesn't make sense. What does make sense though is that Jingye own the milling plants that sustain the UK rail industry, and appear to have built a plant in China subsidised by the Chinese govt geared to meeting that demand; despite having bought and taken subsidies for the express purpose of keeping Scunthorpe going; and while stringing the govt along but then also quietly taking steps to ensure that the blast furnaces would be defecto destroyed. " Any reason you might give for why intervening had to be done is also a reason that can be monetised into representing a company asset." It could be. But then Jingye also needs to explain how its actions make sense *without* it being in violation of agreements to HMG, trade law etc. "I see no evidence of Jingye being a bad actor" I don't think that really matters to anyone else though.
Seb Member	Mon Apr 14 06:59:39 Anyway, compensation will be dealt with later when any transfer of ownership takes place. Right now they are just subject to direction regarding keeping the blast furnaces up to temp.
jergul large member	Mon Apr 14 07:06:57 Seb Defacto confiscation still triggers arbitration. I am sure the multi national corporation will do its due dilligence in establishing the value of the company's physical and not physical assets. The press release seemed to indicate new furnaces were required and that those needed to be subsidized. The company suggested quite high operating losses. Higher perhaps than any government subsidy could cover? Point remains. Jingye is acting as any multinational would. I am happy to discuss this on the basis of modern capitalism being evil and governments having the obligation to force them to heel, but the head office location is supremely irrelevant to that form of discussion.
jergul large member	Mon Apr 14 07:07:46 non-physical*
Seb Member	Mon Apr 14 08:18:58 Jergul: We will see. At the moment it's difficult to see what the damage is. "The press release seemed to indicate new furnaces were required" They previously received hundreds of millions to build arc furnaces (the new furnaces they refer to) keeping the blast furnaces in operation in the meantime. Instead they seem to have used the money to build blast furnaces in China.
Seb Member	Mon Apr 14 08:20:29 "Jingye is acting as any multinational would." I'm not sure that other multi-nationals would agree that they would take subsidies, break contracts, and engage in several months of bare faced lies in direct negotiations with the govt.
Seb Member	Mon Apr 14 08:22:28 Yes yes, I know, you want to use this to move the conversation on to your particular pet points. But the headquarters of the company are relevant unfortunately as it appears to be part of a deliberate piece of economic warfare.
jergul large member	Mon Apr 14 08:34:06 To me it seems the 500 million offered was considerably less than what the company needed for UK steel production to be profitable. Was it also economic warfare when an Indian headquartered company shut down steel production after getting a subsidy package? The main issue in both cases seems to be UK energy prices that are close to twice what European competitors are paying. Steel smelting is highly energy intensive and decarbonization or offsetting is prohibitive. I think you will have to link me up with the previous agreements you think the company entered to build arc furnaces and keeping the blast furnaces in operation. I can only find reference to the 500 million the company said no to. The indian company on the other hand...it took the subsidies and shut down the plants. Perhaps you are conflating the two? My takeaway is that it is probably best to be from a predominately white skinned country if you want to invest in the UK. Malfeance claims seem to be proportionate to the hue in skin tone.
jergul large member	Mon Apr 14 08:40:44 Actually, are not the tarriffs from the US an example of economic warfare with the express and formulated policy of reshoring industry at the expense of other nations? A multinational does not wage economic warfare on its own. How exactly are you suggesting the CCP is ordering the multicorp to shut down factories in the UK? What is the malfeant force behind it all, beyond, well, the established lack of profitability that has seen British steel heamorage money?
Seb Member	Mon Apr 14 08:49:54 Jergul: Tata weren't so fucking daft as to be in negotiation with the UK government on what might be acceptable, while quietly taking the option to do so off the table through technical means. They also didn't build a plant in India with what looks suspiciously like the investment money they'd already got. But perhaps you are correct, and perhaps Jingye can show what investments it made with the subsidies given in 2020 when they bought the plant.
jergul large member	Mon Apr 14 08:53:00 Scunthorpe Steelworks stood for 0,2% of global steel production. Jingye is also a pretty small steel producer relatively speaking. I just dont get what is driving you seb. This is just business. The UK will not save the company without a multi billion dollar investment in addition to buying out the multi corp.
jergul large member	Mon Apr 14 08:57:54 What exactly is this subsidy the UK government had already given British steel and for what purpose while under Jingye ownership? I cannot find it.
Seb Member	Mon Apr 14 12:19:38 Various tax breaks. Also it appears the £1.2bn invested is in fact loans from the parent group created in order to facilitate cashflow to circumvent ban on dividend payments. All very dodgy.
Seb Member	Mon Apr 14 12:23:28 "What exactly is this subsidy the UK government had already given British steel" £800m in indemnities to facilitate the purchase from the liquidator plus soft loans >£100m afterwards.
jergul large member	Mon Apr 14 16:44:56 Link please. Not that I dont trust your interpretation, but frankly, I dont.
Sam Adams Member	Mon Apr 14 18:27:29 Why would you sell your last remaining steel plant to china anyway. How dumb are brits.
murder Member	Mon Apr 14 18:40:38 I assume because no one else wanted it, and nationalization is a bad word in western democracies.
jergul large member	Tue Apr 15 04:17:15 Sammy and murder It had already been sold to an Indian multicorporation, went into bankrupcy and was rescued by a Chinese company. Nationalization is fine and dandy, but it does not change the fundamentals. Forging steel in the UK is uncompetitively expensive for labour and energy price reasons. Billion dollar subsidies are needed regardless of who owns it. Still, multinational corporations. Who cares were they are headquartered. Their loyalties are to their stockholders.
Seb Member	Tue Apr 15 08:13:17 Jergul: Google it? Murder: Essentially that. Jergul: "Their loyalties are to their stockholders" Or in the case of China, a statutory obligation to support state. And so in this case refusing subsidies to keep the plant operational and engaging in negotiations while simultaneously taking steps to put the plant being used while misleading the govt, a belief that they might just be pursuing a Chinese policy of seeking to create dependency on Chinese imports.
Seb Member	Tue Apr 15 08:13:29 Jergul: Google it? Murder: Essentially that. Jergul: "Their loyalties are to their stockholders" Or in the case of China, a statutory obligation to support state. And so in this case refusing subsidies to keep the plant operational and engaging in negotiations while simultaneously taking steps to put the plant being used while misleading the govt, a belief that they might just be pursuing a Chinese policy of seeking to create dependency on Chinese imports.
jergul large member	Tue Apr 15 08:39:35 Seb I did. Not my style to have people chase their tails. I could not find the subsidies of which you speak. I will jot this down as CT nuttery on your part.
jergul large member	Tue Apr 15 08:50:14 Ultimately, the basis does not matter. The UK can nationalize the company and the UK can Huawei any multinational it likes.
murder Member	Tue Apr 15 10:41:22 "Still, multinational corporations. Who cares were they are headquartered. Their loyalties are to their stockholders." No. Chinese companies work for the Chinese Communist Party.
jergul large member	Tue Apr 15 11:37:04 Murder Nah.
Seb Member	Tue Apr 15 11:43:38 Jergul: http://www...seeks-100m-state-loan-11989311 http://www.gov.uk/government/publications/british-steel-ministerial-direction-on-continuation-of-official-receivers-indemnity
jergul large member	Tue Apr 15 12:16:06 2nd link is for an indemity that allowed BS to avoid liquidation before it was bought. The first was the multinational requesting a commercial loan. Weak sauce indeed seb. It is looking more and more like the UK government wanted a multinational company to subsidize steel production in the UK. Which is fair enough I suppose, but that fell through, so now the government has to fund steel production in the UK. By all accounts BS needs a 1-2 billion investment followed by continued support to cover permanent and excessive energy and payroll costs. Or you could just tariff steel imports at high enough levels (I know about the steel safeguard scheme). BS might manage ok in that environment after the 1-2 billion investment has been made. Tariffs are all the rage these days I have gathered
Seb Member	Tue Apr 15 16:15:04 You asked "What exactly is this subsidy the UK government had already given British steel". British Steel got £800m of state subsidy to keep it going while Jingye negotiated its purchase. Some of that went to investments and restructuring to make it viable. That happened under direction, and Jingye is very aware that only happened because the govt considered it paramount that the site continued to operate. They then got a bunch of soft loans, which they appear to have used not to do as they said but finance a new plant in China.
jergul large member	Wed Apr 16 03:35:43 Seb You have not shown 800 million at all. The context is of course since Jingye save the company from bankrupcy. You have in fact given me links to 0 dollars. It seems clear however that Jingye has transferred 100ds of millions to BS to keep it afloat. It is starting to look a lot like the UK wanted Jingye to heavily subsidize steel production in the UK. It feel through, so now the UK has to heavily subsidize steel in the UK. Like I said, it does not matter. The UK is free to buy out the company and free to set up barriers for Chinese capital. I am not sure that is smart, but it is a sovereign decision. It will however be hideously expensive.
jergul large member	Wed Apr 16 03:36:23 fell through*
Seb Member	Wed Apr 16 08:10:56 *Shrug*. Who cares if you are convinced?
jergul large member	Wed Apr 16 08:13:17 That is fair enough. Who indeed cares what any of us think in the grand scheme of things?
Seb Member	Wed Apr 16 08:35:04 Jergul: " It seems clear however that Jingye has transferred 100ds of millions to BS to keep it afloat." Not really, it looks more like they've rung ñ done the standard VC thing of loading the subsidiary with debt to the holding company and then used interests on debt repayment to extract revenue with reduced tax burden.
Seb Member	Wed Apr 16 08:36:03 The figure they are using at least seems to correspond to that, not actual capital investment in plant etc on the site.
williamthebastard Member	Wed Apr 16 09:19:31 Its a shame China hasnt abandoned its persecution of muslims and its desires to conquer Taiwan. Theyve developed passed the US in some other very important areas, like actually investing and growing their middle class, not ignoring the science on the climate etc
Pillz Member	Wed Apr 16 09:26:40 Evaluate this thread. Does wtb's post at the end have any relevance to anything else discussed. (lmao) ===== wtb’s final post in this thread: > "It’s a shame China hasn’t abandoned its persecution of Muslims and its desires to conquer Taiwan. They’ve developed past the US in some other very important areas, like actually investing and growing their middle class, not ignoring the science on the climate etc" …is not relevant to the ongoing conversation in any meaningful rhetorical, topical, or discursive sense. Let’s break that down clearly:
Pillz Member	Wed Apr 16 09:28:01 To be clear: the only way your post is on topic is that it mentions China. It has absolutely zero other points of contextual overlap with this entire thread.
williamthebastard Member	Wed Apr 16 09:33:00 "I assume because no one else wanted it, and nationalization is a bad word in western democracies." The far right has indeed been very successful in making the left not dare to be left anymore. Of course, its common knowledge in all fields that study human behaviour that when one ideology gets a firm grip on society, all of society shifts in that direction. That the political center is always relative and never absolute is a given, and in our era the political center has been shifted as far to the right as in the 30s.
Pillz Member	Wed Apr 16 09:34:56 wtb’s final post in this thread: > “The far right has indeed been very successful in making the left not dare to be left anymore...” (followed by a vague monologue about ideology, political center drift, and nationalization being a "bad word") --- What does this have to do with the thread? Absolutely nothing.
williamthebastard Member	Wed Apr 16 10:18:23 "I assume because no one else wanted it" Its the same story with the right wing govt in Sweden abandoning wind energy etc and wanting to rely fully on companies running nuclear plants. Unfortunately, they cant find any companies that want to do that unless the govt pays for all their costs. What a great business model. Tax payers pay for all the expenses and a private owner gets to keep all the profits that are only possible if all his expenses are paid by someone else.
Pillz Member	Wed Apr 16 10:39:40 It took you an hour to come back to respond to a post murder made 2 days ago. And you post 50% of volume otherwise. So apparently international trade is difficult but you try to follow... You just start with nonsense.
	show deleted posts

Your Name:
Your Password:
Your Message: