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POSSIBLE TOPICS: VOTETEXAS.GOV—Voter Information; HCAD and Runoff Elections; OPINION: It’s Time to End the Quiet Cruelty of Property Taxes; Hidalgo warning: Houstonians in peril due to strained relationship with mayor; ‘Do better’: Texas park calls out visitors for trampling bluebonnets; Tennessee Volkswagen employees overwhelmingly vote to join United Auto Workers union; Disneyland performers file petition to form labor union; Price to Plug Old Wells in Gulf of Mexico? $30 Billion, Study Says.; US Steel’s shareholders just voted to end more than a century of American ownership. It may not matter; Nippon Steel faces twin hurdles to U.S. Steel deal: labor and regulators; US mulling sanctions against other IDF units for alleged rights violations – sources; Chinese Company Under Congressional Scrutiny Makes Key U.S. Drugs; More.

Welcome to Thinkwing Radio with Mike Honig where we discuss local, state, national, and international stories. My co-host, assistant producer and show editor is Andrew Ferguson.

Thinkwing Radio with Mike Honig (@ThinkwingRadio) is now on Wednesdays at 11AM (CT) or Thursdays at 6PM on KPFT 90.1 FM-HD2, Houston’s Community Media. You can also hear the show:

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Except for timely election info, the extensive list of voting resources will now be at the end.

1. I apologize for giving you the wrong date for the Primary election runoffs and the HCAD elections. Primary Election runoffs will be held on Saturday May 4^h. Polls will be open that day from 7am to 7pm.
   1. Harris County election information is available at HarrisVotes(dot)com.
   2. Early voting started on Monday April 22^nd and will continue through Tuesday April 30^th. Polling places will be open every day during early voting from 7am to 7pm, except Sundays when the hours are 12 noon to 7pm.
   3. A list of voting centers in Harris County can be found here.
   4. A list of election day polling places can be found here.
   5. It’s too late to apply for a mail ballot.
   6. Links to county election sites for Harris and adjacent counties can be found at the bottom of this week’s blog post.
   7. At the bottom of this blog post, I’ve also included three reference links that may help you choose among the HCAD candidates on your ballot. The HCAD races are perhaps the most under-the-radar races I’ve ever seen. There’s almost no coverage of them, a point made in my link to Charles Kuffner’s story on the HCAD elections.
   8. While these races are technically non-partisan, we all know that’s a lot of baloney. Party ideology matters in governance.
   9. REFERENCE [Shows which HCAD candidates are Democrats]: Harris Democrats
   10. REFERENCE [Story contains useful links]: Good luck finding any info about those county appraisal board elections — Posted on April 18, 2024 by Charles Kuffner
   11. REFERENCE [Story mentions Labor-endorsed HCAD candidates]: A little-known board oversees Houston property taxes. Voters will now elect members for first time — By Jen Rice, Staff writer | HOUSTONCHRONICLE.COM | April 16, 2024
2. In this season of property tax assessments and appeals, I thought that this story was relevant — OPINION: It’s Time to End the Quiet Cruelty of Property Taxes; By Andrew W. Kahrl | NYTIMES.COM | April 11, 2024
   1. Property taxes, the lifeblood of local governments and school districts, are among the most powerful and stealthy engines of racism and wealth inequality our nation has ever produced. And while the Biden administration has offered many solutions for making the tax code fairer, it has yet to effectively tackle a problem that has resulted not only in the extraordinary overtaxation of Black and Latino homeowners but also in the worsening of disparities between wealthy and poorer communities. Fixing these problems requires nothing short of a fundamental re-examination of how taxes are distributed.
   2. In theory, the property tax would seem to be an eminently fair one: The higher the value of your property, the more you pay. The problem with this system is that the tax is administered by local officials who enjoy a remarkable degree of autonomy and that tax rates are typically based on the collective wealth of a given community. This results in wealthy communities enjoying lower effective tax rates while generating more tax revenues; at the same time, poorer ones are forced to tax property at higher effective rates while generating less in return. As such, property assessments have been manipulated throughout our nation’s history to ensure that valuable property is taxed the least relative to its worth and that the wealthiest places will always have more resources than poorer ones.
   3. Black people have paid the heaviest cost. Since they began acquiring property after emancipation, African Americans have been overtaxed by local governments. By the early 1900s, an acre of Black-owned land was valued, for tax purposes, higher than an acre of white-owned land in most of Virginia’s counties, according to my calculations, despite being worth about half as much. And for all the taxes Black people paid, they got little to nothing in return. Where Black neighborhoods began, paved streets, sidewalks and water and sewer lines often ended. Black taxpayers helped to pay for the better-resourced schools white children attended. Even as white supremacists treated “colored” schools as another of the white man’s burdens, the truth was that throughout the Jim Crow era, Black taxpayers subsidized white education. …
   4. These problems persist. A recent report by the University of Chicago’s Harris School of Public Policy found that property assessments were regressive (meaning lower-valued properties were assessed higher relative to value than higher-valued ones) in 97.7 percent of U.S. counties. Black-owned homes and properties in Black neighborhoods continue to be devalued on the open market, making this regressive tax, in effect, a racist tax.
   5. The overtaxation of Black homes and neighborhoods is also a symptom of a much larger problem in America’s federated fiscal structure. By design, this system produces winners and losers: localities with ample resources to provide the goods and services that we as a nation have entrusted to local governments and others that struggle to keep the lights on, the streets paved, the schools open and drinking water safe. Worse yet, it compels any fiscally disadvantaged locality seeking to improve its fortunes to do so by showering businesses and corporations with tax breaks and subsidies while cutting services and shifting tax burdens onto the poor and disadvantaged. A local tax on local real estate places Black people and cities with large Black populations at a permanent disadvantage. More than that, it gives middle-class white people strong incentives to preserve their relative advantages, fueling the zero-sum politics that keep Americans divided, accelerates the upward redistribution of wealth and impoverishes us all.
   6. There are technical solutions. One, which requires local governments to adopt more accurate assessment models and regularly update assessment rolls, can help make property taxes fairer. But none of the proposed reforms being discussed can be applied nationally because local tax policies are the prerogative of the states and, often, local governments themselves. …
   7. The best way to make local property taxes fairer and more equitable is to make them less important.
   8. [MIKE: Of course, many government policies and laws make that impossible, especially in Texas, but continuing with the story …]
   9. The federal government can do this by reinvesting in our cities, counties and school districts through a federal fiscal equity program, like those found in other advanced federated nations. Canada, Germany and Australia, among others, direct federal funds to lower units of government with lower capacities to raise revenue.
   10. And what better way to pay for the program than to tap our wealthiest, who have benefited from our unjust taxation scheme for so long? President Biden is calling for a 25 percent tax on the incomes and annual increases in the values of the holdings of people claiming more than $100 million in assets, but we could accomplish far more by enacting a wealth tax on the 1 percent. Even a modest 4 percent wealth tax on people whose total assets exceed $50 million could generate upward of $400 billion in additional annual revenue, which should be more than enough to ensure that the needs of every city, county and public school system in America are met. By ensuring that localities have the resources they need, we can counteract the unequal outcomes and rank injustices that our current system generates.
   11. MIKE: I thought this was an interesting article because of the points it made about property taxes being unfair based on race and neighborhood, and because neighborhood appraisals can be inherently unfair, among other points the author makes.
   12. MIKE: But to me, that’s only part of the problem. The major problem is the lack of progressivity. Someone who can afford a $1 million property with a structure should be taxed at a higher rate than someone who can barely afford a $50 thousand property with a structure, if such a thing still exists.
   13. MIKE: Texas is a ruthlessly flat-tax state. It legislatively and constitutionally bars any kind of progressive taxation, so the greatest relative burden is always on those who can least afford it, whether it be property taxes, sales taxes, garbage fees, or whatever.
   14. MIKE: The Texas legislature, under Republican control, has dug its fingers deeply into local governance, severely limiting how cities and counties can raise revenue. Much of this has been enshrined in the Texas constitution after decades of Republican rule, making changes extremely difficult.
   15. MIKE: I’ve said before on this show that many State constitutional amendments should really have been simple legislation, subject to change when voters decide to change the ruling party. In many cases, I’ve recommended voting down these sorts of amendments. But the point of passing constitutional amendments is to make change nearly impossible in the future.
   16. MIKE: As Marc Antony says in Shakespeare’s “Julius Caeser”: “The evil that men do lives after them.” The same can be said of many of Texas’s constitutional amendments.
3. Hidalgo warning: Houstonians in peril due to strained relationship with mayor; The Harris County judge said she and Whitmire still have not met, and with hurricane season looming, she fears their status will “imperil the safety” of millions. By Brooke Kushwaha | CHRON.COM | April 23, 2024
   1. Nearly two months after Harris County Judge Lina Hidalgo’s office first confirmed that she and Mayor John Whitmire had yet to meet, the top two Houston-area officials still haven’t sat down together even as hurricane season looms.
   2. Hidalgo went on Houston Public Media’s Houston Matters Tuesday morning to address the apparent snub and express her concern for how the pair’s strained relationship could affect Harris County residents. In March, Hidalgo’s office said she and Whitmire had yet to meet even after multiple requests on Hidalgo’s part. By contrast, Hidalgo and former mayor Sylvester Turner made many public appearances together during their overlapping time in office and frequently collaborated on joint programs and emergency response initiatives even as their approaches differed.
   3. “I’m hoping to meet him soon,” Hidalgo said. “Harris County has many millions of people. We can’t have the relationship between two people imperil the safety of all the other millions.”
   4. The county judge said a meeting is all the more urgent given that hurricane season is approaching, and the two offices should be on the same page for emergency preparations. Additionally, Hidalgo said she would like to see the city and county collaborate proactively on programs and boost efficiency in the region.
   5. “There’s a lot of political roadblocks that happen between departments that in the past the mayor and I have worked out together,” Hidalgo said.
   6. Whitmire and Hidalgo were last seen together greeting President Joe Biden outside of Air Force One during his fundraising stop in Houston last month. Hidalgo said she most recently requested to get on the books with Whitmire at that meeting, but he refused. …
   7. MIKE: The story then moves into the issues surrounding Harris County’s “Uplift Harris” program and AG Paxton’s lawsuit against it. (Spoiler alert: The Texas Supreme Court has at least temporarily blocked it. See reference link at bottom of this blog post.)
   8. MIKE: As to the main thrust of the story, I think Mayor Whitmire is being awfully childish and petty for man of his age and political experience. At the very least, it’s safe to say that his actions and attitude about meeting County Judge Hidalgo are unprofessional.
   9. MIKE: It is widely thought that the cold shoulder he’s giving Hidalgo goes back to her endorsement of Sheila Jackson Lee for Mayor. If that’s the case, then a grown-up politician like Whitmire should be able to put that aside so that both of them can do their respective jobs more effectively where interaction and cooperation are necessary.
   10. MIKE: If he has other reasons for freezing out County Judge Hidalgo, then Mayor Whitmire should come clean and tell the residents of Houston and Harris County what they are, because as Judge Hidalgo says, a failure of his administration to coordinate with the County in regional emergencies can cost many lives.
   11. REFERENCE: Texas Supreme Court blocks Harris County guaranteed income program; The Republican-led court blocked the county’s anti-poverty program a day before participants were set to begin receiving aid. By Brooke Kushwaha | CHRON.COM | April 23, 2024
4. A brief environmental mention — ‘Do better’: Texas park calls out visitors for trampling bluebonnets; Park staff said tire tracks were found through a stand of bluebonnets and other Texas wildflowers. By Ariana Garcia | CHRON.COM | April 22, 2024
   1. It’s a popular Texas myth that it’s illegal to pick or destroy bluebonnets. However, doing so is still frowned upon as it could potentially prevent fields of the official state flower from growing back. For that reason, one Texas state park known for its beautiful bluebonnet displays took to social media over the weekend to condemn visitors who recently trampled its fields of wildflowers while taking photos. 
   2. “While we absolutely LOVE sharing our bluebonnets and wildflowers with you, we are very disappointed with the level of destruction we saw regarding the visitation and picture-taking,” wrote Inks Lake State Park staff on Facebook on Friday. “Visitors were wading willy-nilly though our Elysian Fields of bluebonnets, … leaving trails, crushed flowers, and a spoiled view behind.” …
   3. “Destroying the flowers before they seed could leave gaps in an otherwise full field, is bad for the birds and insects depend on them, and is just inconsiderate of the visitors coming along behind you,” staff wrote. …
   4. In some general rules, the park instructed visitors to not pick flowers, to remain on trails, and to not park on Park Road 4 for quick photos.
   5. MIKE: This is a heavily excerpted version of this story, but I think it’s applicable anyplace where there are clumps or fields of wild flowers.
   6. MIKE: Enjoy them, photograph them, but don’t harm them. Leave them intact and unharmed for the next folks who come along to enjoy.
5. In resurgent union news, Tennessee Volkswagen employees overwhelmingly vote to join United Auto Workers union; By TOM KRISHER and KRISTIN M. HALL | APNEWS.COM | Updated 12:13 PM CDT, April 20, 2024
   1. Employees at a Volkswagen factory in Chattanooga, Tennessee, overwhelmingly voted to join the United Auto Workers union Friday in a historic first test of the UAW’s renewed effort to organize nonunion factories.
   2. President Joe Biden, who backed the UAW and won its endorsement, said the union’s win follows major union gains across the country including actors, port workers, Teamsters members, writers and health care workers.
   3. The union wound up getting 2,628 votes, or 73% of the ballots cast, compared with only 985 who voted no in an election run by the National Labor Relations Board.
   4. Both sides have five business days to file objections to the election, the NLRB said. If there are none, the election will be certified and VW and the union must “begin bargaining in good faith.” …
   5. Twice in recent years, workers at the Chattanooga plant have rejected union membership in plantwide votes. Most recently, they handed the UAW a narrow defeat in 2019 as federal prosecutors were breaking up a bribery-and-embezzlement scandal at the union.
   6. But this time, they voted convincingly for the UAW, which is operating under new leadership directly elected by members for the first time and basking in a successful confrontation with Detroit’s major automakers. …
   7. Next up for a union vote are workers at Mercedes factories near Tuscaloosa, Alabama, who will vote on UAW representation in May. …
   8. In a statement, Volkswagen thanked workers for voting and said 83.5% of the 4,300 production workers cast ballots in the election.
   9. Six Southern governors, including Tennessee’s Bill Lee, warned the workers in a joint statement this week that joining the UAW could cost them their jobs and threaten the region’s economic progress.
   10. But the overwhelming win is a warning to nonunion manufacturers, said Marick Masters, a business professor at Wayne State University in Detroit who studies the union.
   11. “This is going to send a powerful message to all of those companies that the UAW is knocking at the door, and if they want to remain nonunion, they’ve got to step up their game,” Masters said.
   12. He expects other nonunion automakers to become more aggressive at the plants, and that anti-union politicians will step up their efforts to fight the union.
   13. Shortly after the Detroit contracts were ratified, Volkswagen and other nonunion companies handed their workers big pay raises.
   14. Last fall, Volkswagen raised production worker pay by 11%, lifting top base wages to $32.40 per hour, or just over $67,000 per year. VW said its pay exceeds the median household income for the Chattanooga area, which was $54,480 last May, according to the U.S. Labor Department.
   15. But under the UAW contracts, top production workers at GM, for instance, now earn $36 an hour, or about $75,000 a year excluding benefits and profit sharing. By the end of the contract in 2028, top-scale GM workers would make over $89,000.
   16. The VW plant will be the first the UAW has represented at a foreign-owned automaking plant in the South. It will not, however, be the first union auto assembly plant in the South. The UAW represents workers at two Ford assembly plants in Kentucky and two GM factories in Tennessee and Texas, as well as some heavy-truck manufacturing plants.
   17. Also, more than three decades ago, the UAW was at a Volkswagen factory in New Stanton, Pennsylvania, east of Pittsburgh. VW closed the plant that made small cars in the late 1980s.
   18. MIKE: We rarely get to follow up a story so soon after first discussing it on the show. Last week, we talked about this union vote and that it would be tallied by Friday of last week. Now we get to report that over 80% of the workers’ voted, with almost three quarters of those who voted approving formation of a union. That is extremely decisive.
   19. MIKE: So after decades of Southern states attracting factories based on non-union workers and wages, that wall to improved living standards in the South is starting to crumble.
6. Meanwhile, in “the happiest place on Earth” — Disneyland performers file petition to form labor union; By AMY TAXIN | APNEWS.COM | Updated 2:55 PM CDT, April 17, 2024
   1. Performers who help bring Disney’s beloved characters to life at its Southern California theme parks filed a petition Wednesday to form a labor union.
   2. The workers include parade performers, character actors and support staff at Disneyland and an adjacent theme park, Disney California Adventure. More than two-thirds of roughly 1,700 eligible workers signed the petition to seek an election through the National Labor Relations Board, the workers said, noting that a vote will likely be held in May or June,
   3. At a news conference in Anaheim, which is home to the two theme parks and the Downtown Disney shopping and entertainment district, workers said they also asked The Walt Disney Co. to recognize the union they are calling “Magic United.”
   4. Several workers said they love helping create a magical experience for Disneyland visitors. But they said they grew concerned when they were asked to resume hugging patrons after returning to work during the coronavirus pandemic and they face certain challenges, including injuries from costumes, erratic scheduling and a lack of clear communication from management.
   5. Mai Vo, a 37-year-old performer who has worked for Disney for two decades, said she wore black contact lenses as part of a costume and that they stained her eyes gray. She also was paid less for that job than someone who played a similar role but who was in a union, she said. …
   6. Most of the more than 35,000 workers at the Disneyland Resort, which includes the theme parks, already have unions. Parade and character workers announced their plans to unionize in February under Actors’ Equity Association, which represents theatrical performers at Disney’s Florida theme parks.
   7. In a statement Wednesday, Disney officials said: “We support our cast members’ right to a confidential vote that recognizes their individual choices.”
   8. Union membership has been on a decades-long decline in the United States, but organizations have seen growing public support in recent years amid high-profile contract negotiations involving Hollywood studios and Las Vegas hotels. The NLRB, which protects workers’ right to organize, reported more than 2,500 filings for union representation during the 2023 fiscal year, which was the highest number in eight years. …
   9. In California, Disney’s cleaning crews, food service workers, pyrotechnic specialists and security staff are already unionized. The company has faced allegations in recent years of not paying workers a livable wage for Southern California, despite raking in profits. Wage issues have even wound up in the courts.
   10. Parade performers and character actors earn a base pay of $24.15 an hour, with premiums for different roles that can vary widely, workers said. Until January, the base pay was $20 an hour.
   11. The effort to organize character and parade performers in California comes more than 40 years after those who play Mickey, Goofy and Donald Duck in Florida were organized by the International Brotherhood of Teamsters, a union traditionally known to represent transportation workers. At that time, the Florida performers complained about filthy costumes and abuse from guests, including children who would kick the shins of Disney villains such as Captain Hook.
   12. Kate Shindle, president of Actors’ Equity, said she was confident the California workers would win the election through the NLRB, the federal agency that protects workers’ rights to organize. …
   13. MIKE: This is what I mean when I often say that change is generational. Young people in all sorts of jobs, from physical labor to entertainment, have been working under poor wages, jobs with reduced or zero benefits, and often requiring two or three jobs to make ends meet.
   14. MIKE: In many cases, they’ve grown up seeing their parents working in such circumstances, and now that they find themselves in the same situation, they are increasingly saying with one voice, “That’s not fair!” And their answer is increasingly to fight for collective bargaining as a union.
   15. MIKE: It may be worth noting here that Walt Disney was strongly anti-union. He fought unionization of his company tooth and nail, and built Disney World in Florida at least partly because it was a so-called “right to work” and anti-union state. That may soon be in the process of changing.
   16. MIKE: Better late than never.
7. Last week we discussed the Biden Administration’s new rules for performance bonds on new wells and what that means for post-production cleanup. This story is from May 2023, but explains the problem nicely — Price to Plug Old Wells in Gulf of Mexico? $30 Billion, Study Says.; By Hiroko Tabuchi | NYTIMES.COM | May 8, 2023. TAGS: Gulf of Mexico, Offshore Platforms, Federal Waters, Orphaned Oil And Gas Wells,
   1. Ever since the first offshore platforms went up off Louisiana 85 years ago, the Gulf of Mexico has been an oil and gas juggernaut. But decades of drilling has left behind more than 14,000 old, unplugged wells at risk of springing dangerous leaks and spills that may cost more than $30 billion to plug, a new study has found. Nonproducing wells that haven’t been plugged now outnumber active wells in the gulf, the study says.
   2. The researchers also found that, in federal waters, nearly 90 percent of the old wells were owned at some point in the past by giant oil companies known as the “supermajors,” including BP, Shell, Chevron and Exxon. Under federal law, that means those companies would still be responsible for cleanup costs, even though they might have sold the wells in the past, the study’s authors said.
   3. Oil and gas companies are responsible under federal and state rules for securely plugging wells that are no longer in service. In the boom-and-bust world of oil and gas drilling, though, operators frequently go bankrupt, leaving wells orphaned and unplugged, and taxpayers on the hook.
   4. That raises risks that oil and other pollutants will leak into the ocean and travel to shore and smother wetlands, particularly sensitive salt marshes along the northern Gulf Coast. Wells that aren’t properly plugged with concrete can also leak significant amounts of methane, a potent greenhouse gas that contributes to climate change and its increasingly catastrophic consequences.
   5. Orphaned oil and gas wells are a big issue onshore, too. “But offshore is a different beast, particularly in terms of the costs involved,” said Mark Agerton, an expert in energy economics at the University of California, Davis, who is one of the study’s authors. “The wells are bigger, and they’re just a lot more expensive. You can’t just drive a truck up to it.”
   6. The $1 trillion infrastructure bill that President Biden signed into law in 2021 sets aside $4.7 billion to plug orphaned wells, both onshore and off. That’s a sizable sum, but not nearly enough to cover the backlog of orphaned wells.
   7. Still, in federal waters, the government can hold prior owners of wells liable for plugging them, even if the current owners go under or otherwise don’t fulfill their cleanup obligations. Eighty-seven percent of wells under federal jurisdiction were once owned by one of the supermajors, many of which have recently booked record profits.
   8. “So for federal waters, these companies with deep pockets would be on the hook,” Dr. Agerton said. “There’s someone to go after,”
   9. The companies named in the report did not respond to requests for comment. …
   10. Even as the world starts to transition away from coal, oil and gas toward renewable energy, decades of mining and drilling in almost every corner of the world, including in oceans, have left behind the need for an immense plugging and cleanup effort.
   11. In the gulf, the abandoned wells, platforms and pipelines have also become increasingly vulnerable to extreme weather linked to global warming. When Hurricane Ida hit the Louisiana coast with winds of nearly 150 miles an hour in August 2021, it set off a flurry of oil spills detectable from space. …
   12. MIKE: Again, this describes the scale of the problem with private oil and gas wells that ultimately become a public problem and expense while the companies and people who profited from these wells are usually not held sufficiently responsible. It’s another example of profit being private while pollution is public. This not only speaks to the justification for much larger cleanup performance bonds that will be required going forward, but also problems with enforcement by government agencies to hold companies accountable for their actions without foisting it off on the public purse.
8. US Steel’s shareholders just voted to end more than a century of American ownership. It may not matter; By Chris Isidore | CNN.COM | Updated 5:56 PM EDT, Fri April 12, 2024. TAGS: S. Steel, Nippon Steel,
   1. [On Friday, April 12,] US Steel shareholders … overwhelmingly approved a deal for the iconic American manufacturer to be purchased by Japan’s Nippon Steel. But the outlook for the controversial merger has never looked so bad.
   2. The deal is significant, not just for the future of what is still a key US industry central to building everything from cars to appliances to roads and bridges, it is also at the center of election year politics and relations between the United States and Japan, a major ally. …
   3. But the deal faces [significant] opposition from the United Steelworkers union and politicians on both sides of the aisle. …
   4. For the deal to close, it needs approval from both the Justice Department, which enforces antitrust laws, and the normally low profile but powerful Committee on Foreign Investment in the United States, made up of members of the President Joe Biden’s cabinet, including the secretaries of Treasury, Commerce, Defense, State, Homeland Security and the Attorney General.
   5. And last month [President] Biden came out publicly against the proposed deal.
   6. “It is important that we maintain strong American steel companies powered by American steelworkers,” he said. “US Steel has been an iconic American steel company for more than a century, and it is vital for it to remain an American steel company that is domestically owned and operated.”
   7. Experts said opposition from Biden and other politicians — both Republican and Democrats — make it unlikely the deal will win approval.
   8. “It’s readily apparent … that electoral politics has overwhelmed any serious evaluation of this deal’s national security risk,” said Michael Leiter, head of the [the Treasury Department’s The Committee on Foreign Investment in the United States (CFIUS)] and national security practices at law firm Skadden, Arps, Slate, Meagher & Flom. “That’s regrettable, but if you’re a US Steel shareholder it is impossible to ignore when evaluating the diminishing likelihood of a successful sale.” …
   9. A senior administration official, in a briefing with journalists before the [Japanese] prime minister’s visit, said the administration’s opposition to the deal shouldn’t hurt relations between the countries. …
   10. It’s not just Biden opposing the deal. Numerous Republicans, including Ohio Senator JD Vance, have also denounced the deal, and this week charged that US Steel misled shareholders when seeking support for the deal because it failed “to accurately convey the significant political obstacles and regulatory risks the merger faces.” …
   11. The nation’s automakers wrote to the White House after Biden announced his opposition to the Nippon-US Steel deal to say a Cleveland Cliffs-US Steel deal would place 65% to 90% of steel used in vehicles under the control of a single company. It said it therefore supported the Nippon deal for US Steel instead.
   12. US Steel rival Cleveland Cliffs, the nation’s other major unionized steelmaker, tried to buy US Steel last summer, only to have its $32.53 a share cash-and-stock offer rejected by the company. And [Phil Gibbs, steel analyst with KeyBanc,] said despite the support such a deal would have from the [United Steel Workers (USW)], it’s not clear it would be able to win approval from antitrust regulators. …
   13. Neither US Steel nor Cleveland Cliffs are the largest American steel company today. That would be Nucor, which makes steel with electric furnaces that melt scrap and other raw materials, rather than with the massive blast furnaces used by US Steel and Cleveland Cliffs.
   14. Electric furnaces are more efficient, both in energy use and labor needed, than traditional integrated steel mills that use blast furnaces to make steel from raw materials like iron ore. But Nucor and other steelmakers using electric furnaces have been unable to produce the quality of steel needed by the auto industry — despite decades of trying — partly because their business model means its more profitable to make mass quantities of lower grade steel, said Gibbs.
   15. “Auto steel is still a relatively niche product,” he said. “I think new mills are working in that direction. But it’s not something they can do overnight. Nucor has been working on this for a long time.”
   16. He said Nucor could make automotive quality steel, but it just can’t make much money doing it. …
   17. US Steel has purchased its own electric furnaces to make steel in Arkansas, a nonunion operation that is valued more highly by Nippon in this deal than its unionized blast furnace operations, to which it has assigned relatively little value.
   18. That’s a major reason the USW so strongly opposes the deal, the fear that Nippon would eventually close the blast furnaces operations that employ its members. Nippon insists it will honor US Steel’s contracts with the union should the deal go through.
   19. US Steel said last month in the wake of Biden’s comments that it is still hopeful the deal will be approved and close.
   20. “The President said he has the backs of the steelworkers. So do we,” US Steel said in a statement. “As part of this investment to grow US Steel and the American steel market, it has been made clear that there will be no job losses, no plant closures and no transfer of production resulting from this transaction.” …
   21. But the USW said there is nothing in the negotiation behind the deal that would lead it to trust either company to live up to its commitments. It said a letter it received last month from Nippon was “nothing more than another collection of empty promises and open-ended language that would enable it to skirt obligations to workers and retirees.” …
   22. The national security concerns of the union and politicians opposed to the deal are legitimate, even if steel isn’t thought of as a military asset the way computer chips or other technology might be, according to Gibbs. The loss of the ability to make steel from raw materials — and have the workers trained to make that steel — would have a significant impact, he said.
   23. And given the election year politics, the USW and its ally at Cleveland Cliffs have a fair amount of leverage in fighting this deal, said Gibbs.
   24. “I don’t think the union has held this much leverage in a transaction like this. It’s decided it might as well use it,” he said.
   25. MIKE: I’ll reserve my comments on this story until I also read the next one.
9. Meanwhile, in a story published two days after the one from CNN — Nippon Steel faces twin hurdles to U.S. Steel deal: labor and regulators; Winning shareholder approval was easy, now comes the hard part. AZUSA KAWAKAMI and YUJI OHIRA, Nikkei staff writers | ASIA.NIKKEI.COM | April 14, 2024 05:25 JST
   1. Nippon Steel has come a step closer to acquiring U.S. Steel, but now faces two hurdles: the labor union, which is becoming increasingly vocal in the run-up to the presidential election, and a review by regulators over economic and security implications.
   2. The first step came on Friday when U.S. Steel shareholders approved the proposed acquisition. The percentage in favor was approximately 71% of the total shares.
   3. Nippon Steel has agreed to pay more than $14 billion to acquire U.S. Steel, apparently the largest bid after U.S. Steel offered itself for sale in summer last year.
   4. For shareholders of U.S. Steel, a company with aging manufacturing facilities that are losing competitiveness, there was little reason for rejection. Nippon Steel expected the approval. …
   5. Meanwhile, Takahiro Mori, vice president of Nippon Steel, vowed to support and grow U.S. Steel in the American market.
   6. Nippon Steel plans to bring its expertise in high-grade steel sheet technology for electric vehicles and other products to add value to U.S. Steel products. Nippon Steel, now the world’s fourth-largest producer of crude steel, would be the third largest after the acquisition. Taking advantage of economies of scale, it will also pursue decarbonization of its products and manufacturing processes.
   7. But the outlook for the proposed acquisition, which makes economic sense for Nippon Steel, is uncertain because the United Steelworkers (USW), the largest union in the U.S. manufacturing sector, has consistently opposed it. …
   8. Nippon Steel has proposed concessions to the USW. In March, the Japanese company said an additional $1.4 billion would be invested in U.S. Steel’s mills for modernization. It also pledged not to lay off any employees or close any plants, at least until the current collective bargaining agreement expires.
   9. [MIKE: That’s a pretty important caveat! Continuing with the story …]
   10. The USW is unswayed. …
   11. The USW is driving hard a bargain with Nippon Steel for several reasons. One is the scarcity of labor in the U.S. steel industry. According to U.S. statistics, there were about 80,000 workers in U.S. steel mills in February 2024, down 10% from 10 years ago.
   12. Wage growth is below the U.S. average for all industries. According to U.S. statistics, steelworkers have had a 15% wage increase over the past four years, compared with 20% for all industries. …
   13. The USW represents more than just steelworkers. Workers in a wide range of industries, including metals, mining, paper and energy, are members. Of its 850,000 members, only 10,000 are U.S. Steel employees. USW is negotiating with Nippon Steel with an eye toward improving overall worker treatment in the “industrial pyramid.”
   14. Cleveland Cliffs, a rival to the U.S. Steel takeover bid and has 14,000 USW members, has also joined the union in opposition to Nippon Steel’s acquisition.
   15. With U.S. elections approaching in November, labor unions are now on the offensive against management. Neither Democrats nor Republicans can ignore such a huge voting bloc.
   16. President Joe Biden, who is up for reelection, has prided himself on being the “most pro-union president ever.” …
   17. Former President Donald Trump, meanwhile, said in January, “I would block it instantaneously. Absolutely.”
   18. Another hurdle is the Committee on Foreign Investment in the United States (CFIUS), which examines the impact of foreign investment on economic security. CFIUS has not disclosed the nature of the review, but some U.S. lawmakers have said Nippon Steel has too deep a relationship with the Chinese government.
   19. Nippon Steel does have a long history in [China]. It has cooperated in the construction of steel mills in China since 1978 and has a joint venture with China Baowu Steel Group. However, Nippon Steel argues that the acquisition would help the U.S. in its rivalry with China.
   20. “A takeover could increase U.S. prominence and strengthen its economic security in its relationship to China,” a Nippon Steel executive said.
   21. Nippon Steel’s strategy is to bring U.S. Steel under its umbrella to better compete with Chinese steelmakers that use their excess capacity to flood the world with low-priced products. …
   22. The acquisition of U.S. Steel is essential to Nippon Steel’s growth strategy. The takeover will increase crude steel production capacity from 66 million tonnes to 86 million tonnes, bringing it closer to its 100 million tonne goal. If volume exceeds 100 million tonnes, “that would give us a 10% share of the world market, excluding China,” noted company President Tadashi Imai, solidifying a global presence.
   23. “If it were not a presidential election year, the hurdles to making the takeover happen would have been much lower,” said another Nippon Steel executive.
   24. How Nippon Steel’s takeover proposal fares will [be] sure to have an impact on how other Japanese companies approach the U.S. market, where manufacturing is staging a comeback.
   25. MIKE: This is a complicated situation. What should take precedence? Market efficiency and penetration? Sustainability of US Steel as a self-sufficient concern? National security in the form of American ownership of a strategically important company? Our relationship and demonstrable trust with a strategically important ally in Asia? The anti-trust implications of market dominance in the event of a takeover by a domestic company?
   26. MIKE: And yet, US Steel may be in serious need of the cash infusion offered by this takeover by Nippon Steel for the purposes of modernization and an improved ability to compete in the domestic and world steel market.
   27. MIKE: Maybe, just maybe, this is an example of a case where a government investment in US Steel as a part owner would solve some of these problems.
   28. MIKE: The cash infusion of a government investment might be enough to help US steel to modernize sufficiently to compete more effectively. It would preserve American control of a strategically and commercially important US company.
   29. MIKE: The US government would also profit from any dividends and future stock appreciation that might result from a strengthening of US Steel’s market position.
   30. At some future point, The government could divest itself of the its stock ownership, presumably at a profit, and leave US Steel as a stronger competitor in a tough world market, with it’s strategic importance intact and even improved.
   31. MIKE: Just something to think about.
10. In international news — US mulling sanctions against other IDF units for alleged rights violations – sources; Official says move is part of US policy that disapproves of Israeli conduct in West Bank, but backs right to self-defense; source says practical impact of sanctions may be limited. By Jacob Magid | TIMESOFISRAEL.COM | April 21, 2024 @ 2:25 am
    1. Washington is considering sanctions against other Israeli military and police units alleged to have committed human rights violations against Palestinians in addition to the Netzah Yehuda Battalion, which the Biden administration is slated to designate this week, two US sources told The Times of Israel on Sunday.
    2. The State Department probed Netzah Yehuda and several of the other units in the Israeli security forces for well over a year due to alleged human rights violations.
    3. In the case of Netzah Yehuda, the IDF in December 2022 decided to move the infantry unit largely comprised of ultra-Orthodox nationalists out of the West Bank so they would no longer be in contact with Palestinians. But no steps were taken to hold specific soldiers accountable for the repeated incidents of misconduct against Palestinians that ran rampant in Netzah Yehuda, a US official said, explaining the unprecedented decision to move ahead with sanctioning an Israeli military unit.
    4. The practical impact of the sanctions may be limited, though. They will bar Israel from using US military aid to purchase weapons for Netzah Yehuda, but Israel could still use its own funds to purchase weapons for the beleaguered battalion, a second US source said.
    5. However, as with the sanctions that the US began imposing this year against violent settlers, the US source predicted that other Western countries would follow Washington’s lead in targeting units that rights groups have found to repeatedly and unjustly target Palestinians.
    6. While much of the focus is on conduct taking place in the West Bank, the source speculated that probes will also be opened into units operating in Gaza, given the flood of videos that IDF soldiers have posted on social media throughout the war against Hamas that show them violating the IDF’s code of conduct.
    7. The US source noted that the Biden administration was differentiating between its disapproval of Israel’s actions in the West Bank while continuing its robust support of Israel more broadly, including through the $14 billion aid package passed by Congress over the weekend.
    8. The [Israeli] Walla news site, which broke the story on the impending US sanctions, noted that this was not an issue of Israel being singled out by the Biden administration. Around the same time that the US began probing Netzah Yehuda, it also started investigating a special forces unit in the Australian army over allegations that it had carried out human rights abuses in Afghanistan. But unlike the IDF, the Australian army took significant steps against the unit, including the criminal prosecution of one of the unit’s soldiers.
    9. The sanctions are being levied under what is known as the Leahy Law, which prohibits providing military assistance to individuals or security force units that commit gross violations of human rights and have not been brought to justice. Sanctioned units are also banned from participating in joint military drills with the US Army.
    10. While the State Department looks into thousands of allegations of Leahy Law violations each year, it created a special panel known as the Israel Leahy Vetting Forum that exclusively vets allegations against the IDF and Israel Police due to the political sensitivity of the issue.
    11. ProPublica reported last week that US Secretary of State Antony Blinken sat on the panel’s recommendation regarding Netzah Yehuda for months ostensibly concerned about the political ramifications of the move.
    12. However, the US official says the administration was not avoiding this week’s announcement and was long planning on tying it to the State Department’s human rights report, which will be released this week.
    13. Responding to the reports, Prime Minister Benjamin Netanyahu said on Sunday he would fight against sanctions being imposed on any Israeli military units for alleged rights violations. …
    14. Netzah Yehuda, or Judea Forever, has historically been based in the West Bank and some of its members have been linked to abuses against Palestinians. It makes up just a small part of Israel’s military presence in the territory.
    15. The battalion has been at the center of several controversies in the past connected to right-wing extremism and violence against Palestinians, notably including the 2022 death of Omar As’ad, a 78-year-old Palestinian-American who died after being detained, handcuffed, blindfolded, and later abandoned in near-freezing conditions by soldiers of the battalion.
    16. Israel moved the unit out of the West Bank in December 2022 — though it denied it did so due to soldiers’ behavior — and it has since served mostly in the country’s north. It has also been deployed to the Gaza Strip amid the ongoing war against Hamas. …
    17. MIKE: The rest of the article is mostly about Benjamin Netanyahu and various Israeli officials and spokespersons arguing that unit sanctions are unjustified and will be strongly opposed.
    18. MIKE: BTW, a subsequent short story from The Times of Israel has a US official stating that, “Under the Leahy Act, certain units would be ineligible for American security assistance until the violations are remedied.” I’m not sure if that is a material distinction or a matter of “tomato/toMAHto”.
    19. MIKE: Personally, I think that this would be an entirely appropriate action by the United States. It’s actually in the interest of both the US and Israel to identify and punish units and individuals who commit human rights violations and war crimes rather than providing fodder for vilifying the entire country for the actions of a few.
    20. MIKE: I think that Israel would be doing itself a major favor both domestically and internationally by working with the US to identify and punish individuals and units found to have committed war crimes, rather than claiming that there were no such crimes and attempting to ignore them.
    21. MIKE: However, in this context, keep in mind that this is an extreme rightwing Netanyahu government. Consider it the equivalent of 16 years of Trump rule, where Trump pardoned US Blackwater contractors convicted of war crimes in Iraq. This is the kind of government we’re currently dealing with in Israel, and it does Israel no favors on the world stage.
    22. MIKE: I’m including a reference link below this article from ProPublica which examines this story with deeper background, and which I consider a fair, non-partisan assessment.
    23. REFERENCE: Blinken Is Sitting on Staff Recommendations to Sanction Israeli Military Units Linked to Killings or Rapes; A special State Department panel told Secretary of State Antony Blinken that the U.S. should restrict arms sales to Israeli military units that have been credibly accused of human rights abuses. He has not taken any action. by Brett Murphy | PROPUBLICA.ORG | April 17, 4:20 p.m. EDT
11. Chinese Company Under Congressional Scrutiny Makes Key U.S. Drugs; Lawmakers raising national security concerns and seeking to disconnect a major Chinese firm from U.S. pharmaceutical interests have rattled the biotech industry. The firm is deeply involved in development and manufacturing of crucial therapies for cancer, cystic fibrosis, H.I.V. and other illnesses. By Christina Jewett | NYTIMES.COM | April 15, 2024 / Updated 3:47 p.m. ET
    1. A Chinese company targeted by members of Congress over potential ties to the Chinese government makes blockbuster drugs for the American market that have been hailed as advances in the treatment of cancers, obesity and debilitating illnesses like cystic fibrosis.
    2. WuXi AppTec is one of several companies that lawmakers have identified as potential threats to the security of individual Americans’ genetic information and U.S. intellectual property. A Senate committee approved a bill in March that aides say is intended to push U.S. companies away from doing business with them.
    3. But lawmakers discussing the bill in the Senate and the House have said almost nothing in hearings about the vast scope of work that WuXi does for the U.S. biotech and pharmaceutical industries — and patients. A New York Times review of hundreds of pages of records worldwide shows that WuXi is heavily embedded in the U.S. medicine chest, making some or all of the main ingredients for multibillion-dollar therapies that are highly sought to treat cancers like some types of leukemia and lymphoma as well as obesity and H.I.V.
    4. The Congressional spotlight on the company has rattled the pharmaceutical industry, which is already struggling with widespread drug shortages now at a 20-year high. Some biotech executives have pushed back, trying to impress on Congress that a sudden decoupling could take some drugs out of the pipeline for years.
    5. WuXi AppTec and an affiliated company, WuXi Biologics grew rapidly, offering services to major U.S. drugmakers that were seeking to shed costs and had shifted most manufacturing overseas in the last several decades.
    6. WuXi companies developed a reputation for low-cost and reliable work by thousands of chemists who could create new molecules and operate complex equipment to make them in bulk. By one estimate, WuXi has been involved in developing one-fourth of the drugs used in the United States. WuXi AppTec reported earning about $3.6 billion in revenue for its U.S. work.
    7. “They have become a one-stop shop to a biotech,” said Kevin Lustig, founder of Scientist.com, a clearinghouse that matches drug companies seeking research help with contractors like WuXi.
    8. WuXi AppTec and WuXi Biologics have also received millions of dollars in tax incentives to build sprawling research and manufacturing sites in Massachusetts and Delaware that local government officials have welcomed as job and revenue generators. One WuXi site in Philadelphia was working alongside a U.S. biotech firm to give patients a cutting-edge therapy that would turbocharge their immune cells to treat advanced skin cancers.
    9. The tension has grown since February, when four lawmakers asked the Commerce, Defense and Treasury Departments to investigate WuXi AppTec and affiliated companies, calling WuXi a “giant that threatens U.S. intellectual property and national security.”
    10. A House bill called the Biosecure Act linked the company to the People’s Liberation Army, the military arm of the Chinese Communist Party. The bill claims WuXi AppTec sponsored military-civil events and received military-civil fusion funding. …
    11. Last month, after a classified briefing with intelligence staff, the Senate homeland security committee advanced a bill by a vote of 11 to 1: It would bar companies from receiving government contracts for work with Wuxi, but would allow the companies to still obtain contracts for unrelated projects. Government contracts with drugmakers are generally limited, though they were worth billions of dollars in revenue to companies that responded to the Covid-19 pandemic.
    12. [Richard Connell, the chief operating officer of WuXi AppTec in the United States and Europe,] defended the company’s record, saying the proposed legislation “relies on misleading allegations and inaccurate assertions against our company.” …
    13. Smaller biotech companies, which tend to rely on government grants and have fewer reserves, are among the most alarmed. Dr. Jonathan Kil, the chief executive of Seattle-based Sound Pharmaceuticals, said WuXi has worked alongside the company for 16 years to develop a treatment for hearing loss and tinnitus, or ringing in the ear. Finding another contractor to make the drug could set the company back two years, he said.
    14. “What I don’t want to see is that we get very anti-Chinese to the point where we’re not thinking correctly,” Dr. Kil said.
    15. It is unclear whether a bill targeting WuXi will advance at all this year. The Senate version has been amended to protect existing contracts and limit supply disruptions. Still, the scrutiny has prompted some drug and biotechnology companies to begin making backup plans. …
    16. The chill toward China extends beyond drugmakers. U.S. companies are receiving billions of dollars in funding under the CHIPS Act, a federal law aimed at bringing semiconductor manufacturing stateside.
    17. For the last several years, U.S. intelligence agencies have been warning about Chinese biotech companies in general and WuXi in particular. The National Counterintelligence and Security Center, the arm of the intelligence community charged with warning companies about national security issues, raised alarms about WuXi’s acquisition of NextCODE, an American genomic data company.
    18. Though WuXi later spun off that company, a U.S. official said the government remains skeptical of WuXi’s corporate structure, noting that some independent entities have overlapping management and that there were other signs of the Chinese government’s continuing control or influence over WuXi.
    19. Aides from the Senate homeland security committee said their core concerns are about the misuse of Americans’ genomic data, an issue that’s been more closely tied to other companies named in the bill.
    20. Aides said the effort to discourage companies from working with WuXi and others was influenced by the U.S. government’s experience with Huawei, a Chinese telecommunications giant. By the time Congress acted on concerns about Huawei’s access to Americans’ private information, taxpayers had to pay billions of dollars to tear Huawei’s telecommunication equipment out of the ground.
    21. Yet WuXi has far deeper involvement in American health care than has been discussed in Congress. Supply chain analytics firms QYOBO and Pharm3r, and some public records, show that WuXi and its affiliates have made the active ingredients for critical drugs. …
    22. [MIKE: The article then goes into some specify of the importance of WuXi in developing and manufacturing essential drugs for the US market. The story then wraps up with this…]
    23. Stepping away from WuXi could cause a “substantial slowdown” in drug development for a majority of the 105 biotech companies surveyed by BioCentury, a trade publication. Just over half said it would be “extremely difficult” to replace China-based drug manufacturers.
    24. BIO, a trade group for the biotechnology industry, is also surveying its members about the impact of disconnecting from WuXi companies. John F. Crowley, BIO’s president, said the effects would be most difficult for companies that rely on WuXi to manufacture complex drugs at commercial scale. Moving such an operation could take five to seven years.
    25. “We have to be very thoughtful about this so that we first do no harm to patients,” Mr. Crowley said. “And that we don’t slow or unnecessarily interfere with the advancement of biomedical research.”
    26. MIKE: This is another example of how risky it is to national security to let a potential adversary become too important as a supplier of essential products, whether they be products for health, parts for products, or essential industries like ship building.
    27. MIKE: Recall that during Covid, the US had to import personal protective equipment (PPEs) such as medical masks from China.
    28. MIKE: As a large, wealthy, geopolitically important nation, the US should not and cannot let itself be excessively dependent on important products and supplies from non-allied countries.
    29. MIKE: I don’t consider this position to be protectionism. I consider it to be strategic source allocation.

=====================================================

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