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Despite Blocked US Steel Bid, Japan Won’t Stop Seeking American Deals

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Despite Blocked US Steel Bid, Japan Won’t Stop Seeking American Deals

As signs emerged that President Biden was gearing up to stop the Japanese steel maker Nippon Steel from acquiring Pittsburgh-based U.S. Steel, top Japanese officials repeatedly warned that quashing the merger would hinder economic ties between the allies.

Japan’s biggest business lobby, Keidanren, said in September that America’s investability would be tarnished if Nippon Steel’s $15 billion bid was blocked. Prime Minister Shigeru Ishiba of Japan reached out to Mr. Biden asking him to approve the deal during what he called a critical juncture.

In the United States, during a heated presidential campaign, both Mr. Biden and his opponent, Donald J. Trump, came out against the Japanese acquisition of U.S. Steel, an iconic American company in a key electoral state. Mr. Biden on Friday stopped the merger from going forward, arguing that foreign control of U.S. Steel would jeopardize America’s national security.

Nippon Steel and U.S. Steel assailed Mr. Biden’s decision, calling the deal’s review “deeply corrupted by politics” and its rejection “shocking.” The companies said on Friday they would consider taking legal action to try to revive the deal.

But while Mr. Biden’s decision sends a worrying sign to Japanese leaders about the perils of American politics, it is not expected to stop other companies from seeking to do deals in the United States.

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Japanese businesses have had little choice but to move significantly toward the United States in recent years, as they have had a harder time investing in China. Now, in anticipation of a second Trump administration, executives are even more busily lining up fresh investments in America.

For decades, Japanese companies have sought growth opportunities outside the country, where the population is aging and declining, and currency fluctuations have imperiled export activities. Much of that expansion has been aimed at the United States and China, which have long vied to be Japan’s biggest trade partner.

But it has gotten more difficult for Japanese firms to operate in China because of less-friendly regulations and competition from state-backed rivals. China’s share of Japanese foreign direct investment has declined steadily over the past half-decade, while it has climbed in the United States. Japan became the top investor in America in 2019 — a position it has maintained each year since.

While the volume of Japanese-led deals in the United States stalled slightly last year, trade experts expect investments to pick up again when President-elect Trump takes office. That is because the risk of increased tariffs gives Japanese and other foreign companies a greater incentive to invest and produce in the United States over other countries, especially China.

Japanese power companies are eyeing a number of potential investments in natural gas and other energy projects promoted by Mr. Trump. At a Trump news conference last month, Masayoshi Son, the chief executive of the Japanese technology company SoftBank, pledged to invest $100 billion in the United States over the next four years.

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“Business leaders will not look at a unique case like Nippon Steel and make decisions to withhold investment in the United States,” said Masahiko Hosokawa, a professor at Meisei University and former senior official at Japan’s trade ministry. “This is not a case that will cause damage, especially in the mid- to long term.”

Japan’s biggest business publication, Nikkei, wrote on Saturday that Nippon Steel’s crushed bid was a result of a mistaken calculation that “economic rationality” would prevail even in a presidential election year.

In December 2023, when Nippon Steel announced its plans to acquire U.S. Steel, executives at the company thought the deal would proceed quickly. As the Committee on Foreign Investment in the United States reviewed the deal, Nippon Steel doubled down on its bet on the United States, withdrawing from a longstanding joint venture in China that might have elicited suspicion from regulators.

Nippon Steel’s bid instead drew intense backlash from some politicians and union leaders, who said the purchase of a storied American manufacturer by a foreign entity would undermine national security and local industry. Early on, both President Biden and President-elect Trump said they were against the deal.

As part of its bid, Nippon Steel offered a large premium on U.S. Steel shares and promised to invest billions in the American company’s plants. Takahiro Mori, the Nippon Steel executive in charge of the deal, traveled repeatedly to the United States to hold meetings with over 1,000 employees, local officials and others with a stake in the deal.

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Late last month, the review committee, known as CFIUS, sent a letter to the White House saying it was unable to decide whether Nippon Steel should be allowed to buy U.S. Steel. That paved the way for President Biden to terminate the transaction.

China, at the same time, has been trying to bolster relations with Japan. Some speculate the moves were made in anticipation of a trade war between the United States and China that is expected to worsen when Mr. Trump takes office.

In November, Beijing restarted a policy allowing Japanese nationals to make short-term visits without visas. Japan has been working to ease visa requirements for Chinese visitors. In September, China said it would gradually resume Japanese imports of seafood after banning them in response to Japan’s release of treated radioactive water into the ocean.

William Chou, the deputy director of the Japan policy center at the Hudson Institute, a Washington think tank, said he viewed the Nippon Steel case as a “one-off.”

“The U.S. has a long history of being a stable environment, and China is not an attractive place to increase investments at the moment,” Mr. Chou said. “But that’s not to say Japan won’t feel the inclination to hedge its bets.”

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In July, as signs emerged that Nippon Steel’s acquisition might not be approved, one of its distributors, Marubeni-Itochu Steel, said it would purchase a stake in a Spanish steel company.

A person with knowledge of the purchase said Nippon Steel was eager for Marubeni-Itochu Steel to expand its presence in Europe, an increasingly important market since hopes were fading that Nippon Steel would gain a bigger toehold in the United States.

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Disney warns that ESPN, ABC and other channels could go dark on YouTube TV

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Disney warns that ESPN, ABC and other channels could go dark on YouTube TV

Walt Disney Co. is alerting viewers that its channels may go dark on YouTube TV amid tense contract negotiations between the two television giants.

The companies are struggling to hammer out a new distribution deal on YouTube TV for Disney’s channels, including ABC, ESPN, FX, National Geographic and Disney Channel. YouTube TV has become one of the most popular U.S. pay-TV services, boasting about 10 million subscribers for its packages of traditional television channels.

Those customers risk losing Disney’s channels, including KABC-TV Channel 7 in Los Angeles and other ABC affiliates nationwide if the two companies fail to forge a new carriage agreement by Oct. 30, when their pact expires.

“Without an agreement, we’ll have to remove Disney’s content from YouTube TV,” the Google Inc.-owned television service said Thursday in a statement.

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Disney began sounding the alarm by running messages on its TV channels to warn viewers about the blackout threat.

The Burbank entertainment company becomes the latest TV programmer to allege that the tech behemoth is throwing its weight around in contract negotiations.

In recent months, both Rupert Murdoch’s Fox Corp. and Comcast’s NBCUniversal publicly complained that Google’s YouTube TV was attempting to unfairly squeeze them in their separate talks. In the end, both Fox and NBCUniversal struck new carriage contracts without their channels going dark.

Univision wasn’t as fortunate. The smaller, Spanish-language media company’s networks went dark last month on YouTube TV when the two companies failed to reach a deal.

“For the fourth time in three months, Google’s YouTube TV is putting their subscribers at risk of losing the most valuable networks they signed up for,” a Disney spokesperson said Thursday in a statement. “This is the latest example of Google exploiting its position at the expense of their own customers.”

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YouTube TV, for its part, alleged that Disney was the one making unreasonable demands.

“We’ve been working in good faith to negotiate a deal with Disney that pays them fairly for their content on YouTube TV,” a YouTube TV spokesperson said in a statement. “Unfortunately, Disney is proposing costly economic terms that would raise prices on YouTube TV customers and give our customers fewer choices, while benefiting Disney’s own live TV products – like Hulu + Live TV and, soon, Fubo.”

Disney’s Hulu + Live TV competes directly with YouTube TV by offering the same channels. Fubo is a sports streaming service that Disney is in the process of acquiring.

YouTube said if Disney channels remain “unavailable for an extended period of time,” it would offer its customers a $20 credit.

The contract tussle heightens tensions from earlier this year, when Disney’s former distribution chief, Justin Connolly, left in May to take a similar position at YouTube TV. Connolly had spent two decades at Disney and ESPN and Disney sued to block the move, but a judge allowed Connolly to take his new position.

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YouTube TV launched in April 2017 for $35 a month. The package of channels now costs $82.99.

To attract more sports fans, YouTube TV took over the NFL Sunday Ticket premium sports package from DirecTV, which had been losing more than $100 million a year to maintain the NFL service. YouTube TV offers Sunday Ticket as a base plan add-on or as an individual channel on YouTube.

Last year, YouTube generated $54.2 billion in revenue, second only to Disney among television companies, according to research firm MoffettNathanson.

The dispute comes as NFL and college football is in full swing, with games on ABC and ESPN. The NBA season also tipped off this week and ESPN prominently features those games. ABC’s fall season began last month with fresh episodes of such favorite programs as “Dancing with the Stars” and “Abbott Elementary.”

ABC stations also air popular newscasts including “Good Morning America” and “World News Tonight with David Muir.” Many ABC stations, including in Los Angeles, run Sony’s “Wheel of Fortune” and “Jeopardy!”

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“We invest significantly in our content and expect our partners to pay fair rates that recognize that value,” Disney said. “If we don’t reach a fair deal soon, YouTube TV customers will lose access to ESPN and ABC, and all our marquee programming – including the NFL, college football, NBA and NHL seasons – and so much more.”

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10 years since Aliso Canyon: Disaster was wake-up call for U.S. on dangers of underground gas

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10 years since Aliso Canyon: Disaster was wake-up call for U.S. on dangers of underground gas

On an evening 10 years ago, Porter Ranch resident Matt Pakucko stepped out of his music studio and was walloped by the smell of gas — like sticking your head in an oven, he recalled.

Pakucko called the fire department. It turned out crews had already been up to the Aliso Canyon gas storage facility in the Santa Susana Mountains behind the neighborhood, responding to a report of a leak. Many of his neighbors were beginning to feel ill, reporting issues such as heart palpitations, vomiting, burning eyes and bloody noses.

“I swear I thought I was standing behind a 747 with its engines blowing — it was not just gas, it was oil smell, it was chemical smell that permeated,” recalled Pakucko, who went on to co-found the advocacy group Save Porter Ranch. “I couldn’t stay out there for 30 seconds. It tasted like f— gasoline.”

Soon it was clear that this wasn’t just a leak — it was a blowout. Over the course of 112 days, the Aliso Canyon facility would spew an estimated 120,000 tons of methane and toxic chemicals into the atmosphere. It was the worst natural-gas well blowout in U.S. history, and an environmental disaster whose effects will be unpacked for generations.

The event was widely seen as a wake-up call to the dangers of methane and underground natural gas storage. Methane, a planet-warming greenhouse gas, is about 80 times more potent than carbon dioxide and is responsible for about a quarter of all the human-caused climate change we are experiencing. A study published by UCLA researchers last month found that women in their final trimester of pregnancy who were living within 6.2 miles downwind of the blowout in 2015 had a nearly 50% higher-than-expected chance of having a low birth-weight baby.

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The blowout ushered in a wave of new regulations to strengthen the governance of natural gas storage facilities in California and the United States, as well as new tools and technology to monitor methane emissions.

But 10 years later, some Porter Ranch residents say the wounds still feel fresh, and too many promises have been broken. After the disaster, then-Gov. Jerry Brown called for the permanent closure of Aliso Canyon by 2027 — a goal his successor, Gavin Newsom, called a top priority and vowed to meet even sooner.

Instead, Aliso Canyon remains open, with regulators voting in December to continue using the facility for years — probably into the 2030s — citing the need for natural gas to help maintain affordable energy rates and grid reliability in California.

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The facility is a key asset for Southern California Gas. In an emailed statement, the company said the state would struggle to meet electricity demand without Aliso Canyon’s storage. The site fuels 17 power plants and helps keep the lights on during the hours that can’t yet be met by solar, wind and other renewable resources, the company said. Natural gas still represents about 40% of the state’s electricity supply.

“There’s a lot of work to do to get off natural gas and oil in California,” said Adam Peltz, senior attorney with the nonprofit Environmental Defense Fund. “That work is underway, but it’s not complete. If you’ve built an economy on fossil fuels, it takes awhile to get off of it.”

Aliso Canyon was originally drilled as an oil field in the late 1930s before SoCalGas converted it to natural gas storage in the early 1970s. Utilities often use played out crude oil fields as places to pump gas downward under pressure and hold it until it is needed.

Aliso Canyon is one of the largest natural gas storage facilities in the U.S.

In the lead-up to the blowout, SoCalGas was filling the site in preparation for the winter heating season. Crews were using tremendous force to pump gas down a well that was more than 60 years old. But a metal casing on well SS-25 had corroded, and gas began blowing out at very high volumes.

Methane is not visible to the naked eye, but aerial images captured with infrared cameras and released by the Environmental Defense Fund showed a geyser-like eruption of the flammable, climate changing gas — making it clear to the whole world the magnitude of the disaster.

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A man with glasses, in a dark jacket and red shirt, stands near people holding a sign and a banner

Matt Pakucko, right, founder of Save Porter Ranch, and other protesters against SoCalGas hold a rally at the intersection of Tampa Avenue and Rinaldi Street on Sept. 28, 2021, in Porter Ranch.

(Irfan Khan / Los Angeles Times)

It took nearly four months for crews to stop the leak. By that time, damage was done. More than 8,000 households were temporarily displaced, businesses were shut down, and two schools were relocated for several months.

Researchers are still working to unpack the health outcomes of the event. SoCalGas, meanwhile, has paid about $2 billion in settlements and agreed to operate the facility at a lower maximum pressure.

Officials with the gas company said they have shored up the facility, including replacing the inner steel tubing on all operating wells and conducting continuous ambient methane monitoring. All wells at the site are subject to real-time pressure readings and visual inspections four times a day, among other protocols, SoCalGas said.

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“Over the past 10 years, SoCalGas has conducted comprehensive safety reviews and implemented multiple safety layers that protect one of California’s most important assets for energy reliability and affordability,” the company said.

While the maximum allowable operating pressure at the site remains reduced — about 3,183 pounds per square inch compared with 3,600 pounds per square inch in 2015 — state officials recently voted to let SoCalGas increase storage at the facility to 68.6 billion cubic feet of natural gas from 41 billion cubic feet, outraging many in the community.

But experts say there are silver linings to the disaster. California overhauled its underground natural gas storage regulations to make them the strongest in the nation and among the strongest in the world, according to Peltz, of the Environmental Defense Fund. The changes include more thoughtful rules for well construction, better monitoring and risk management, and improved planning and emergency response.

Congress reacted to the disaster by requiring its regulatory agency, the Pipeline and Hazardous Materials Safety Administration, to issue safety standards for natural gas storage nationwide. In 2016, it adopted best practices recommended by the American Petroleum Institute, which were strengthened at the beginning of this month.

Many states with natural gas storage previously had no regulations at all, Peltz said.

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“On a national basis, the systems will be safer as a result of that change,” he said.

There have been technological advancements too. The infrared aerial recording of the leak captured in 2015 was a relatively new technique at the time, but has now become commonplace. The California Air Resources Board conducted its first large-scale statewide aerial methane survey in 2016, identifying many of the largest methane sources in the state.

There have also been considerable advancements in the ability to observe methane super-emitters through satellites and remote sensors, according to Seth Shonkoff, executive director at the science research institute PSE Healthy Energy and an associate researcher at the UC Berkeley School of Public Health.

“The rub is that we know more than we ever have, and we’re perhaps controlling more than we would have if we didn’t have the technology to see them, but we’re still seeing more and more of these large-scale emission events all across the United States and all across the world,” he said.

Methane concentrations in the atmosphere are still rising. It is streaming, often constantly, from facilities associated with the oil and gas industry, landfills and dairy farms, among other sources.

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View of a storage facility in a hilly area with winding roads

The Aliso Canyon Southern California Gas storage facility on May 28, 2020.

(Robert Gauthier / Los Angeles Times)

Methane isn’t the only concern either. Researchers now have a better understanding of what’s in the gas that blew from Aliso Canyon and that continues to be stored in natural gas facilities around the country. Although it is primarily composed of methane, roughly 99% of samples analyzed by Shonkoff and his team have contained hazardous air pollutants such as benzene, hexane and toluene, largely as a result of commingling with depleted oil and other subsurface materials.

Moving forward, he said, it will be critically important for gas companies to disclose to regulators and risk managers what their gas is composed of, so that if it leaks, responders can quickly determine the appropriate response.

“If we had had that with Aliso Canyon, we could have, within a matter of hours, understood whether people should get out of the way or stay inside, and we wouldn’t have had as many people suffering from health symptoms,” Shonkoff said.

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In 2024, the Biden administration passed the first comprehensive rules to limit methane pollution by fining oil and gas developers for excessive emissions. But this year, the Trump administration revoked the rule, which it described as a tax.

At the same time, many natural gas storage facilities across the country are old and require retrofitting to meet current regulations, but such upgrades can be slow and expensive — often leaving ratepayers on the hook.

Residents near Aliso Canyon have also long feared an earthquake or wildfire in the area. The gas field sits along the Santa Susana fault and is in a high fire hazard severity zone. SoCalGas says it has numerous safety plans and procedures in place.

Perhaps the greatest tension remains between those who wish to see Aliso Canyon shuttered and the officials who say the facility is critically important to California’s energy supply, which is increasingly trying to serve power-hungry artificial intelligence data centers.

People sitting on a road, holding large posters of officials. Behind them are people in dark uniforms and a hilly landscape

Dozens of Porter Ranch protesters chant “shut it all down,” as they demonstrate at the Aliso Canyon gas storage facility in Porter Ranch on May 15, 2016.

(Francine Orr / Los Angeles Times)

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California has committed to reaching 100% carbon neutrality by 2045. But SoCalGas says it still needs Aliso Canyon.

“SoCalGas is aligned with the state of California in pursuing the technologies and infrastructure that supports California’s climate plan, including clean renewable hydrogen and renewable natural gas, that could, over time with other renewable energy projects, deliver the reliability and affordability Aliso Canyon supports today,” the utility said in a statement. However, any decision to reduce or eliminate operations at Aliso Canyon must be based on genuine reduced demand that is permanent, the company said.

Pakucko, of Save Porter Ranch, noted that the facility was offline for two years after the blowout without an interruption in service.

“Two years!” he said. “And guess what? We managed without the facility.”

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For others in the area, it feels like the latest in string of broken promises.

Among SoCalGas’s settlement agreements was a $120-million consent decree with the state of California requiring the utility to fund methane mitigation projects, air monitoring and other initiatives to address alleged harms caused by the blowout. About $25 million of that went toward a long-term health study on the effects of natural gas exposure, which is being conducted by researchers at UCLA. The results are eagerly awaited.

About $26 million went to a program for dairy digesters in the Central Valley, which capture methane from cow manure before it enters the atmosphere. Many had hoped those funds would be spent closer to home, including former L.A. Mayor Eric Garcetti, who at one point envisioned the mitigation money being used to transform Porter Ranch into a net-zero community.

“That would have been so great,” said Patty Gleuck, a Porter Ranch resident who served on the community advisory group for the health study. Instead, “that money went to this dairy digester program that does not benefit this area.”

Like Pakucko, Gleuck recalled suffering health effects during the blowout, including a tightness in her chest and a metallic taste in her mouth that dissipated when she left the area and resumed when she returned.

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She still suffers from a chronic cough and uses an inhaler, she said, adding that “a lot of inhalers were prescribed in the area.”

“A lot of people moved away, taking a loss on their homes because they were so sick, or their family members were sick,” she said. “I just don’t think that there has been justice.”

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Cable giant Charter cuts 1,200 managers from its workforce

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Cable giant Charter cuts 1,200 managers from its workforce

Cable giant Charter Communications is laying off 1,200 employees nationwide as the company faces increased competition for its broadband internet packages.

The company operates Spectrum cable TV and broadband service, which was once a huge growth engine. But the company has faced a steady drumbeat of subscriber losses, including shedding 177,000 internet customers in the first and second quarters of this year.

The company has nearly 30 million internet customers.

The layoffs, equivalent to a little more than1% of its workforce, hit corporate and management positions at Charter’s headquarters in Stamford, Conn., and centers in Charlotte, Denver and St. Louis, according to a person familiar with the cuts but was not authorized to comment.

No sales or service positions were eliminated, the person said, adding the cuts were part of an effort to streamline management functions. The company is scheduled to announce its third-quarter earnings next week.

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In addition to its internet service, Charter provides bundles of cable television channels to 12.6 million customers.

It also has nearly 11 million mobile phone subscribers.

The move comes in advance of Charter’s planned takeover of Cox Communications, which also operates in Southern California. This week’s cuts were not related to the Cox transaction, the knowledgeable person said.

Charter’s $34.5-billion industry-consolidating deal with Cox, which was unveiled in May, needs regulatory approval but that process has been slowed by the federal government shut-down.

Charter reported that it had about 94,500 active full-time workers at the end of 2024.

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The company’s stock is down 27% since the beginning of the year. On Wednesday, shares slipped around 1% in mid-day trading.

Broadband internet has been the company’s bright spot as revenue from cable TV packages steadily declined over the years amid consumer cord-cutting and the shift to streaming.

Charter recognized that trend and began offering streaming apps to its broadband customers to help with retention efforts.

Two years ago, the company suffered huge cable TV customer losses during its 10-day blackout of Walt Disney Co. channels, including ESPN, during a tense distribution battle.

Charter was able to wrangle the ability to offer Disney’s streaming apps, including Disney+ and Hulu, to Spectrum customers.

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The company had already been undergoing scattered instances of belt-tightening.

In August, Charter canceled its award-winning El Segundo based news show, “LA Times Today,” a collaboration with the Los Angeles Times, which ran on the cable company’s Spectrum 1 news channel.

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