Want to stop the port deal? - think "Breech of Contract" (a sticky wicket)

[MazeRat7]

Ok folks, there are still threads floating about on "stopping the port deal" and the like. While I like none of this and posted over a week ago that either choice (DP World vs PSA) was bad, the bottom line is P&O is selling its assets (which includes operational contracts) and of course they are a British company.

In the grand scheme of things, they (the shareholders of P&O) can pretty much sell to whoever they want and there is precious little we the US can do about it, other than bitch, wring hands, and gnash teeth.

So the question becomes, what can the US government do when a non-US corporation with interest in the US makes a sale that is not in the interest of the US ?

At the end of the day, this deal is going to happen and quite frankly I suspect the EU is the only governmental organization required for "buy off" of the deal since the company being sold is not a US company but is in fact a British company. (I say "suspect" since I dont know the sale #'s that trigger EU oversight for a corporate sale)

The answer is: There is nothing the US government can do contrary to the "feel good" measures of control many are talking about. This is a regional issue beyond the control of the feds.

There is however one option available to the local port authorities that honor those "operational contracts". Declare them null and void. This will of course lead to a legal fight, tons of $$$ on lawyers, etc, for each local entity but ultimately, its each local port that defines/approves/honors their "contracts".

So if you want the "stop the port deal" I would suggest putting pressure on each local port authority to publicly state they will not "honor the contracts" and are "willing to fight" while concurrently looking for another vendor of said services. Beyond that, if they are not willing to fight, then consider this a done deal.

MZr7

[napi21]

1. Possibly not true.

I certainly know nothing about the content of these particular contracts, but most that I am aware of have language in them that would give options to any "third parties" in the transaction of a sale. I'd be quite surprised if the US didn't have options to cancel the deal. As far as I know, nothing has yet been signed by the US, so there should still be options to say no.

[MazeRat7]

2. Possible.. I agree. But so far the evidence does not support that.

I agree that sounds like a good, coverage clause. But is that there ? Everything I have read on this tells me the local port authorities negotiate and enforce these operational contracts. From a purely business perspective, I just don't see where the fed is in control here (other than making statement to appease the populous). That was mostly the point of my post *grin. How can the fed stop this ? My position is they can't but the locals can.

MZr7

[napi21]

9. You could be right on at least part of that.

I know Gov. Rendell of Pa. said the other day that the contract with a PA port expires in six months and they just won't renew it.

I guess the thing that doesn't fit here is WHAT does Shrub have to sign? I keep hearing that the deal is set to close on March 2nd and Shrub will sign it along with the UAE Co. What is HE signing if the locals have control of the contracts?

[MazeRat7]

10. That is my point!! What is the feds role in all this other than ceremonial

Everyone keeps talking about committee approval and chimp's signature, but I cant figure out what the hell it is they are talking about (signing) and how it can make a difference in a non-US corporate sale to another no-US company.

My "GUESS" is this "signature" is mostly a resolution to the international community that says we "support the deal". But if we were to issue a statement that said we "did not support the deal"... how would that change the deal ? P&O would say "fine Sam".. but we are selling. Dubai would say, "fine Sam"... but we have a contract.

So bottom line, its like you said, each port authority has the responsibility to decide "who" gets operations at their port. I think the feds being in this is a complete red herring.

MZr7

[htuttle]

3. Regardless of the contractual complications and potential penalties here

...'Contractual obligations' sure the hell didn't stop us from violating the UN Charter to invade Iraq. Concern about laws didn't stop us from violating the Geneva Conventions at Guantanamo and Abu Ghraib.

It would be more than a little disengenuous for the Bush administration to point to 'contractual obligations' as a reason why they have to "sell out our ports to the Arabs" (in Bush's bases' minds, in any case).

[MazeRat7]

4. What ? How is any of what you just said "on-topic" ?

Great rant.. but not relative to this discussion. Thanks anyway. *grin.


MZr7

[htuttle]

7. Well, I admit I meandered a bit when I got some steam up

But my point was why does a company that we 'don't like' (as in our government doesn't like them) have to be allowed to administrate US ports?

Just because P&O, the company being purchased, currently has these operational contracts, that doesn't mean that we HAVE to honor them and allow them to continue to administer the ports once they are under new ownership. If the sale can't be stopped, the operational contracts don't have to be honored. Contracts are no more binding than international law (on paper anyway...in real life, possibly different story).

But you basically already said all that more usefully than I did, so my post probably does deserve this:



Carry on...

[MazeRat7]

8. Well you know.. that is the root question that could change things.

Your question: "my point was why does a company that we 'don't like' (as in our government doesn't like them) have to be allowed to administrate US ports?"

Is dead on. The irony is appalling. We have a government that is beholden to corporations for some good but mostly bad reasons. Then all of a sudden, there is an "uncomfortable" relationship established by the same rules those in power hold sacred.

Certainly I don't support this deal, but I also know it will happen. The real end-game, in terms of political points, is making the case of unfettered capitalism, vis-a-vie corporate dominance, needs to be regulated. Be it ports, tech, durable goods, etc... all have an impact on the vitality (and security) of this nation.

So butter up those bunny flap-jacks and carry on... this is going to be a landmark case against globalization. *grin.

MZr7

[HockeyMom]

5. Port Authority of New York/New Jersey has filed suit

A few days ago.

[MazeRat7]

6. Exactly!!! Thanks for the validation.

[UTUSN]

11. It AIN'T gonna be stopped, O.K.? n/t

[MazeRat7]

12. Thank you. Thats exactly my point. *grin