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

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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.

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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.

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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.

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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.

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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)

Kiara Grace is a staff writer at VORNews, a reputable online publication. Her writing focuses on technology trends, particularly in the realm of consumer electronics and software. With a keen eye for detail and a knack for breaking down complex topics, Kiara delivers insightful analyses that resonate with tech enthusiasts and casual readers alike. Her articles strike a balance between in-depth coverage and accessibility, making them a go-to resource for anyone seeking to stay informed about the latest innovations shaping our digital world.

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A Former OpenAI Leader Says Safety Has ‘Taken A Backseat To Shiny Products’ At The AI Company

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A former OpenAI executive who quit earlier this week warned Friday that safety has “taken a backseat to shiny products” at the influential artificial intelligence firm.

Jan Leike, who led OpenAI’s “Superalignment” team with a business co-founder who also left this week, stated in a series of posts on the social media platform X that he joined the San Francisco-based startup because he believed it was the ideal place to conduct AI research.

“However, I have been disagreeing with OpenAI leadership about the company’s core priorities for quite some time, until we finally reached a breaking point,” wrote Leike, who resigned on Thursday.

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AP – VOR News Image

A Former OpenAI Leader Says Safety Has ‘Taken A Backseat To Shiny Products’ At The AI Company

By training, Leike, an AI researcher, feels there should be a greater emphasis on preparing for the next generation of AI models, including safety and studying the societal consequences of such technology. He stated that developing “smarter-than-human machines is an inherently dangerous endeavor” and that the company “is shouldering an enormous responsibility on behalf of all of humanity.”

OpenAI must become a safety-first AGI company,” stated Leike, using the shortened term of artificial general intelligence, a futuristic concept of robots that are as generally intelligent as humans or can do many things as well as people.

Open AI CEO Sam Altman responded to Leike’s postings, saying he was “super appreciative” of his efforts to the firm and was “very sad to see him leave.”

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Ap – VOR News Image

A Former OpenAI Leader Says Safety Has ‘Taken A Backseat To Shiny Products’ At The AI Company

Leike is “right, we have a lot more to do; we are committed to doing it,” Altman added, promising to publish a lengthy post in the coming days

The company also stated on Friday that it has disbanded Leike’s Superalignment team, which was formed last year to focus on AI threats, and will integrate the team’s personnel into its research operations.

Leike resigned after OpenAI co-founder and chief scientist Ilya Sutskever announced his departure on Tuesday after nearly a decade with the company. Sutskever was one of four board members who voted to remove Altman last October, only to quickly reinstall him. Sutskever informed Altman that he was fired last November, although he later admitted he regretted doing so.

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AP – VOR News Image

A Former OpenAI Leader Says Safety Has ‘Taken A Backseat To Shiny Products’ At The AI Company

Sutskever stated that he is working on a new project that is meaningful to him but did not provide further specifics. He will be succeeded by Jakub Pachocki as head scientist. Altman described Pachocki as “also easily one of the greatest minds of our generation” and stated that he is “very confident he will lead us to make rapid and safe progress towards our mission of ensuring that AGI benefits everyone.”

On Monday, OpenAI demonstrated the most recent version of its artificial intelligence model, which can emulate human cadences in vocal responses and even attempt to discern people’s moods.

SOURCE – (AP)

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Under Armour Was A Real Threat To Nike. Now It’s Fighting To Stay Relevant

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It was previously seen as a viable competitor to Nike. But at the moment, Under Armour, founded by a 23-year-old former collegiate athlete, is struggling to “just do it.”

Instead, the brand championed on the basketball court by Stephen Curry and on the golf course by Jordan Spieth is now struggling — badly — to find its footing in an increasingly competitive and crowded sportswear marketplace for regular people, where younger shoppers are more enamored with newer entrants like Hoka and On running shoes.

Under Armour’s annual sales have been lackluster at best in recent years, and the stock has fallen 88% since its all-time high in 2015. According to industry observers, the company is mired in an uncomfortable mix of challenges, including an identity crisis, many management disputes, neglecting emerging market trends to its harm, and a rapid succession of CEOs.

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Under Armour Was A Real Threat To Nike. Now It’s Fighting To Stay Relevant

One of them is the company’s creator, Kevin Plank, who has returned as CEO for the second time after being removed in 2019. Like Starbucks founder Howard Schultz and Disney CEO Bob Iger, Plank seeks to right the ship at Under Armour.

“When Under Armour was growing at 20% or higher, people saw it as a legitimate competitor to Nike,” said David Swartz, senior equities analyst at Morningstar, in an interview with CNN.

“It was like On or Hoka a decade ago. The upstart athletic brand was making significant advances against Nike, the industry’s main brand. People regarded it as a firm that could break through and take Nike’s market share among serious athletes,” Swartz explained. “That actually did happen for a while, but then that didn’t last.”

Plank founded Under Armour in 1996 to provide what the name implies: a protective layer of clothing worn by competitive athletes sweating it out in the heat of the game.

The initial product was “The Shorty,” a fitted T-shirt composed of moisture-wicking fabric that professional athletes could wear beneath their uniforms to stay dry. The famous Under Armour “U” and “A” logo was deliberately placed on the neckline to keep it visible.

The T-shirt finally propelled the brand to the masses after gaining popularity among elite sportsmen immediately. Under Armour went public in 2005 due to the startup’s rapid success. Its early tagline was “Protect This House.”

By 2010, the company had surpassed $1 billion in revenue. Five years later, revenues topped $4 billion. But then the impetus began to ebb.

Prolonged period of discomfort.

Under Armour has struggled for the past eight years, and the situation does not look to improve.

The company announced a corporate restructuring on Thursday, following a 10% drop in North American revenues in the most recent quarter. The corporation has issued a bleak prediction for the current fiscal year, expecting sales to fall 15% to 17%. Layoffs would be part of the attempt to right the ship, although officials did not say how many people would lose their jobs.

Under Armour has launched a $500 million share buyback program to reward shareholders.

During the earnings call on Thursday, Plank stated that he will lead a business reset that focuses on selling fewer but more innovative products to meet the needs of athletes, significantly accelerating product development, refocusing on the men’s apparel category, and reducing product discounts

“We’re just doing too much stuff. There are too many items and projects. To rebuild this brand, we must be laser-focused and prioritize what needs to be done so that our staff know exactly what to do and have a clear definition of success for them,” Plank added.

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CNN – VOR News Image

Under Armour Was A Real Threat To Nike. Now It’s Fighting To Stay Relevant

It cannot be denied that management concerns have plagued the company for years, Swartz stated.

“The company has essentially had five CEOs in the past five years, if you count Kevin Plank twice,” stated Swartz. Plank was announced as CEO again in March, following Stephanie Linnartz’s brief year-long stint.

During the analyst call Thursday, Plank admitted that regular C-suite churn has significantly hindered success.

“With several CEOs and heads of product, marketing in North America over the past half-decade, ongoing turnover of critical leadership has been central to our inability to stay agile and decisive,” he stated.

According to Swartz, “things really started to fall apart” at Under Armour beginning in 2016. A major problem developed when an essential distribution route for the company went bankrupt and closed stores.

Under Armour’s products are mostly offered through athletic goods merchants and department stores, such as Macy’s and Kohl’s, as well as online.

“When Sports Authority declared bankruptcy in 2016, Under Armour suffered greatly. It was a significant customer for the brand, as was Dick’s Sporting Goods,” Schwartz stated.

UCLA sued Under Armour in 2020 after terminating a $280 million sponsorship agreement. The lawsuit claimed that Under Armour was struggling before Covid-19 and used the epidemic as an excuse to withdraw from the agreement.

According to Eric Smallwood, president of Apex Marketing Group, a sports and entertainment organization that examines sponsorships and advertising campaigns, the brand’s long-term celebrity-brand collaborations are performing well.

“Under Armour’s partnership with ‘The Rock’, Dwayne Johnson, has been quite successful. They’ve expanded into the United Football League, which Johnson co-owns,” Smallwood explained. “Their uniforms are Under Armour.”

According to Smallwood, the brand is also making advances in golf, and the Stephen Curry alliance has kept it visible in the basketball world.

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CNN – VOR news Image

Under Armour Was A Real Threat To Nike. Now It’s Fighting To Stay Relevant

In 2013, basketball superstar Stephen Curry, probably the finest shooter in history, notably signed for Under Armour over Nike. Meanwhile, Joel Embiid, the brand’s other prominent NBA star, left Under Armour in 2023, just months after being awarded the league’s most valuable player.

Embiid inked a sneaker contract with Skechers last month. Under Armour reportedly bid strongly for WNBA star Caitlin Clark, who is expected to sign with Nike.

“The bottomline for Under Armour is for the brand to be clear about its identity,” he stated. “Are they a shoe company?” Are they an apparel company? Everyone else eventually replicated their moisture-wicking undershirt. Then, perhaps they experienced an identity crisis. It will come down to determining if they want to expand into a lifestyle brand or stick with performance-based products.

SOURCE – (AP)

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Boeing Whistleblower Died By Suicide, Police Investigation Reveals

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Boeing whistleblower John Barnett committed suicide, according to a police report released on Friday, bringing an investigation into the shocking death of a longtime employee who raised concerns about the airplane manufacturer’s safety and production standards – and who sued the company, alleging illegal retaliation against him.

Barnett, 62, was discovered dead in a vehicle on March 9 from a self-inflicted gunshot wound in Charleston, South Carolina. Officers were summoned to perform a welfare check on Barnett at a Holiday Inn after he failed to appear for a deposition in his complaint against Boeing, according to his lawyers and a police incident report.

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AP – VOR news Image

Boeing Whistleblower Died By Suicide, Police Investigation Reveals

When responding officers arrived, they discovered Barnett deceased in the driver’s seat of a truck in the parking lot. He was clutching a firearm. The initial police report also stated a message in the truck.

However, in a statement released after his death, Barnett’s lawyers stated that his deposition was nearing completion and that he appeared to be in high spirits.

“We saw no sign that he would commit suicide. “No one can believe it,” his attorneys, Robert Turkewitz and Brian Knowles, stated in a statement on March 12. “The Charleston police need to investigate this fully and accurately and tell the public what they find out.”

The Charleston Police Department announced Friday that the Charleston County Coroner’s Office had decided that Barnett had committed suicide.

The inquiry revealed that Barnett was shot in the head at close range, with the firearm located in his right hand. A notebook was also discovered in the front seat of the car, indicating that “he was going through a period of serious personal distress,” according to a police press statement.

Police provided CNN with a photograph of a note left in the car, which had several nasty statements addressed at Boeing.

“As this investigation comes to a close, we should not forget it represents the loss of Mr. Barnett’s life,” police stated. “We extend our deepest sympathies to his family during this difficult time and hope they continue to find the strength to persevere in absence.”

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Reuters – VOR News Image

Boeing Whistleblower Died By Suicide, Police Investigation Reveals

Boeing did not immediately respond to requests for comment. In March, the firm expressed its sadness at Barnett’s death.

“Our thoughts are with his family and friends,” the business stated.

Barnett, a former quality manager who had worked at Boeing for decades, told the New York Times in 2019 that he had uncovered dangerous wiring clusters in Boeing’s manufacturing procedures that could have resulted in an aircraft’s catastrophic failure if severed by surrounding metal slivers.

“As a quality manager at Boeing, you’re the last line of defense before a defect makes it out to the flying public,” Barnett told the New York Times. “And I haven’t seen a plane out of Charleston yet that I’d put my name on saying it’s safe and airworthy.”

In a message issued to the facility’s employees and sent to CNN at the time, Brad Zaback, a site leader at the plant and general manager of the 787 program, stated that the Times’ coverage “paints a skewed and inaccurate picture of the program and of our team (at the plant).”

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boeing – VOR News Image

Boeing Whistleblower Died By Suicide, Police Investigation Reveals

Zaback, who said the Times denied an invitation to tour the company, stated that “quality is the bedrock of who we are” and that the plant produces “the highest-quality airplanes.”

Since Barnett’s original public warnings about Boeing, the corporation has had multiple high-profile safety and quality issues, including the explosion of a door stopper on a 737 Max shortly after takeoff last January. This prompted the US Justice Department to announce that Boeing could face criminal charges for its history of safety issues.

SOURCE – (AP)

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