David Shepardson
WASHINGTON (Reuters) – A group representing major automakers called on the White House on Friday to oppose any attempt by steelmaker Cleveland-Cliffs (NYSE:) to buy rival U.S. Steel, warning the deal could lead to anticompetitive vehicle prices.
“A combination of the two companies would also bring 65 to 90 percent of the steel used in vehicles under the control of one company,” Alliance for Automotive Innovation CEO John Bozzella said in the letter, first reported by Reuters.
Earlier this month, President Joe Biden said US Steel, which agreed to be bought by Japan’s Nippon Steel for $14.9 billion, should remain a domestically owned American firm. Cleveland-Cliffs said it would consider another bid for US Steel if the Nippon Steel deal falls apart.
“If the administration has concerns about the Nippon Steel transaction, it should seriously consider alternative developments,” the group representing General Motors (NYSE:) said in a letter. Toyota Motor (NYSE:) Corp, Volkswagen (ETR:), Hyundai (OTC:) and others. “One option that should not be discussed is an agreement that would concentrate the market for domestic steel production in one company.”
The White House, Cleveland-Cliffs and US Steel did not immediately comment on the letter.
The combination of US Steel and Cleveland-Cliffs will control “100% of the domestic electrical steel (e-steel) needed for electric vehicle (EV) engines and electric vehicle manufacturing,” the automaker group said in a letter.
He warned that the deal could “raise the cost of both steel and e-steel, and ultimately increase the cost of finished vehicles (including electric vehicles) for American consumers.”
In October, the group wrote to Congress, the Federal Trade Commission and the U.S. Department of Justice to express its concerns about the collaboration, citing concerns about steel used to make vehicle structural frames, automotive surface panels such as doors, hoods and fenders, and also electric motors.