Answering ArcelorMittal: a memorandum with Mittal and a three-way defensive alliance (2007)

Between rivalry and cooperation

The core of this judgement was that, facing an opponent of overwhelming scale, Nippon Steel did not try to match it head-on at the same size but used rivalry and cooperation selectively. Having no base in Europe, and obliged to keep supplying its automaker customers there, it signed a memorandum with the very company it had named as its counterweight. At home, at the same time, it shored up its footing through an alliance with Sumitomo Metal and Kobe Steel that added scale and secured its supply of crude iron, all while unable to place itself entirely beyond the reach of a takeover. A realism that gives up the name to take the substance runs through the whole sequence.

The alliance was not uniformly warm, however, and the banner of a counterweight did not mean everyone marched in step. In the end the two that bound themselves most tightly, Nippon Steel and Sumitomo Metal, went on to merge, while cooperation with Mittal — the party that was supposed to be opposed — deepened. The line between who you join and who you fight kept being redrawn. Under the pressure of global consolidation, the boundary between rivalry and cooperation is in constant motion; the position of steel as a national industry is visible in what followed from this decision.