While American companies were trying to stay out of bankruptcy, foreign steel markets desperately need to sell to the relatively open U.S. markets. At the same time, three European companies, France's USINOR, Luxembourg's Arbed SA, and Spain's Aceralia Corp, were merging to form the world's largest steel company. Japanese companies NKK Corp. and Kanwasaki Steel Corp. were also talking of merging to become the second largest steel company in the world. These large companies would be in a position to out muscle the U.S. competitors. The largest U.S. company, U.S. Steel, was only the world's eleventh largest, and would be pushed further back by these mergers.
The U.S. companies were faced with not only cheaper imports, but also rising energy costs at home, a weaker demand for steel, tougher environmental l