In all the furor over the DP World takeover of P&O and as a result some of their port assets in America, a remarkable amount of misinformation, misrepresentations and outright lies are being circulated by those who think they can gain political advantage from the situation. It's pure fearmongering for political advantage with virtually no substance to support it. Here are some of the claims and why they lack substance.
This Was a 'Secret' Deal
Except for the multiple press releases from the companies involved and the coverage in the business press of the bidding war for P&O which has been going on since October of last year with no one in the political world or the media paying any attention.
The Deal Was 'Rushed' Through
Except that the bidding and negotiating on this deal has been going on since last fall as a public business transaction.
The Deal Was Given Special Treatment
Except that in fact the P&O purchase was reviewed by multiple US government agencies including the Coast Guard , the National Security Council, the Department of Homeland Security, and the Treasury Department's Committee on Foreign Investments. In addition DP World was cleared by the Committee on Foreign Investment in the US (CFIUS), a US government panel with representatives from 12 agencies which assesses security risks associated with foreign companies buying or investing in the US. They said that they had "thoroughly reviewed the potential transaction and concluded they had no objection."
There Was No 45-Day Review
Except that a 45-day review is only required if one of the investigating agencies involved in clearing the deal requests one and in this case after doing their own reviews of the deal none of them raised any concerns so a 45 day review was not required.
DP World is 'Taking Over Control' of Our Ports
Except that the reality is that they are only gaining control of individual freight terminals (docks and warehouses) in each of the ports, not the ports themselves, and each of those ports has multiple freight terminals under control of many different companies. The ports are usually actually owned and managed by the cities where they are located.
Article comments
1 - chantal stone
thanks for shedding some light on a situation i knew next to nothing about.
it does sound like a politically motivated controversy, and those raising stink about it should really be just as concerned about the Chinese companies as well.
i wonder, though, why no American companies have stepped forward to offer the same service(s)?
2 - lumpy
I was watching the talking heads this morning and the democrats they had on were just straight lying as far as I can tell. I hadn't even read this article yet and things they were saying were obviously false just based on what i've seen on the news. how do they think they can get away with this?
3 - Dave Nalle
i wonder, though, why no American companies have stepped forward to offer the same service(s)?
Now that's a good question. American companies ought to be where there's money to be made. But I think that the reason this is the case is two-fold. First, those American companies interested in this business ended up eventually being bought out by international companies which took over their assets. Plus companies which invest in these sorts of things tend to be multinationals and end up in tax haven countries like Dubai where there's lots of easy capital to be had. And second, DP World paid an awfully high price for P&O as result of a bidding war with Singapore, a price so high that I doubt anyone who didn't have more money than sense or a compelling business interest because of already a prior presence in the industry, would ever pay it.
Dave
4 - Dave Nalle
how do they think they can get away with this?
Well, with the media not going into any depth and Bush unpopular, I think they are convinced they can say any damned thing they want and no one will challenge them.
Dave
5 - Howard
"i wonder, though, why no American companies have stepped forward to offer the same service(s)?"
Due to crude oil selling for $60/bbl while its producers can make big money when selling it for $10/bbl, the Mideast is awash in cash. Dubai probably paid an enormous premium for P & O because they have no other place to invest their surplus cash. American companies don't have that luxury.
6 - Dave Nalle
Spot on, Howard. They outbid the Singaporeans by almost a dollar a share just to end the bidding war and make the deal.
Dave
7 - Nancy
Got to admit, this is one big contrived tempest in a teapot. Remember, all, this is an election year, so are we surprised by all the posturing? It's free, & the actual stakes are minimal - perfect for political pecksniffs on both sides of the aisle to claim they're strong on national security. Altho I gotta say I do agree it's about time the Republicans in congress finally stood up & told Dubya they won't blindly trust him, after all the screwups he & his crew have committed.
8 - Dave Nalle
The reason we see everyone bashing on Bush now over this issue is that since he's on the way out he can't help them much in reelection, so they're trying to advance themselves at his expense.
Dave
9 - Kathy
Hi, Dave:
Sure, we could do a regular "debate" post. ;-)
And how do I get a cute bio/pic like you have? (*giggle*)
Kathy