Saturday, February 14, 2009

60 Minutes: CEO Making $2.77 Million Wants Protectionism for His Company Nucor and Big Steel

Click on the arrow above, and watch Nucor CEO Dan DiMicco argue why his company and his industry need protection with "Buy American" provisions in the stimulus bill.

Won't that lead to retaliation from countries around the world asks reporter Leslie Stahl? "No, not true, that's garbage," says DiMicco. Watch the full 60 Minutes episode tomorrow night.

Update from Reuters: The final version of the economic stimulus bill requires public works and building projects funded by the stimulus package to use only U.S.-made goods, including iron and steel.

Question: If Big Steel gets protection with "Buy American" provisions, would Mr. DiMicco and his top Nucor executives agree to a $500,000 pay cap instead of their current salaries, e.g. $2.77 million plus an additional $435,000 in options for Mr. DiMicco, and similar multi-million dollar amounts for his VPs?


At 2/14/2009 8:45 AM, Blogger Econotics said...

Amazing. For a CEO to be that ignorant is... depressing.

At 2/14/2009 9:57 AM, Blogger Paul said...

I'm so tired of these thugs who don't think they should have to compete with the world like the rest of us in non-protected industries do.

At 2/14/2009 10:11 AM, Blogger fboness said...

Ayn Rand nailed these looters. Give her credit for that.

At 2/14/2009 12:18 PM, Anonymous Anonymous said...

Does anybody recognize Orren Boyle? (read Atlas Shrugged). Of course he would trash the Free Market--Free Men don't pay to support incompetence. "You can study it at Harvard, just don't try and take away my gun!"

At 2/14/2009 1:47 PM, Anonymous Anonymous said...

"Ayn Rand nailed these looters. Give her credit for that."

This is exactly what i was thinking.

As a possible sign of hope, i went to my public library this last week to find all 16 copies of Atlas Shrugged in the system were checked out. Looks like there are at least a few people out there thinking we are currently living in her novel.

At 2/14/2009 8:12 PM, Blogger Craig Howard said...

"Amazing. For a CEO to be that ignorant is... depressing."

Though I prefer people with business experience in government, I've noticed that all too many of them don't really have any knowledge of economics. The economy, to them, is just a system to be gamed and the concept of free-enterprise is completely foreign.

At 2/14/2009 9:51 PM, Blogger Realist Theorist said...

The mixed economy is capitalism fighting two things: socialism of course... but, also, good old mercantilism.

At 2/16/2009 3:44 AM, Anonymous Anonymous said...

My favorite is the comment about free trade: "If you wan't to study it at Harvard, study it at Harvard! It ***doesn't work in the real world, it has no application!"

At 2/17/2009 10:33 PM, Blogger David Foster said...

Wonder how Dan would like it if his company were required to buy all their equipment from U.S. sources only?

If memory serves, the continuous casting machines that were so vital to Nucor's success came from Germany.

At 2/18/2009 11:28 AM, Blogger jjd27 said...

It is important to remember that the "Buy American" clause is jsut a stimulous package deal not onging US Policy. It is only intended to jumpstart the US economy afterwich it will be global business as usual.
Do you really want your billions in stimulous dollars stimulating other countries economies? Wake up everyone, Nucor is right!

At 2/18/2009 11:38 AM, Blogger Realist Theorist said...

jjd27: Money spent abroad is spent in the U.S. by foreigners. If we buy steel from Korea, they might buy a few extra Boeings. We "protect" Nucor at the cost of Boeing.

David: Good observation about the German machinery. I might steal the line.

At 4/06/2009 11:41 AM, Anonymous Colascguy said...

If you actually watched the segment and have ever read anything that Dan DiMicco has published you would realize that he is not a protectionist. The 60 minutes interview was edited down to several sound bites but he did hit on Dumping and currency manipulation. You better wake up or the US car industry will disappear.

Please download and read this

At 4/06/2009 4:03 PM, Blogger Realist Theorist said...

Colascguy, I actually sympathize with part of the argument... foreign government intervention does distort the free-market and create problems for companies like NUCOR.

However, one has to be clear about what concrete items one considers to be "foreign intervention". For instance, the biggest reason the US loses market share to foreign producers in any field is that foreign labor is cheaper (not just basic wages rates, but also health-care etc.). This is *not* an example of intervention.

Similarly, when a foreign government does not impose higher corporate taxes, or has laws that keep unions in check, or has slack safety laws, or does not bother about environmental pollution, that too is not an example of foreign intervention. Rather, it is an example of U.S. governmental intervention not being matched by a foreign government.

As to currency "manipulation", this would not arise if the US did not insist on having a fiat currency in the first place: you live by it, you die by it. Even with a fiat currency, the options of foreign currency "manipulators" would be extremely constrained in the U.S. government ran a budget surplus, instead of running deficits. it would be further constrained if the US government did not underwrite Fannie/Freddie and encourage foreigners to fund those bonds.

The bottom-line is this: while other governments are responsible for some of the problems, the biggest culprit is the U.S. voter, not the foreign voter. If we fix our own house, the other problems will be minor.

Finally, about the US auto industry disappearing: as far as I'm aware, there is no chance that the U.S.-based Japanese plants will disappear. The primary reason for the state of the Michigan-based plants is: unionism. If NUCOR had the unionism plagues, they'd have died a long time ago.


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