U.S. Protectionism Article Summary US

U.S. Protectionism Article Summary

US Protectionism Paper Summary

In the article Chinese Bid to Buy Unocal Was Bad Deal for America by Lou Dobbs published on August 19, 2005 Mr. Dobbs argues that the sale of Unocal to Chinese-Based Chinese National Offshore Oil Company (CNOOC) is not in shareholders' interest despite the offer being at one point $2B above rival bidder Chevron's bid. Dobbs continues to argue that the value of Unocal is best measured from an egalitarian-like approach to balancing all shareholder constituent needs, from stockholders to employees to institutional stock investors. The discussion of shareholder value is again discussed at the end of the article, this time with the point being made that Unocal, as the provider of a strategic energy resource for the U.S. should be "off the table" as an asset for sale globally. Heralding the work of Representative Duncan Hunter (R-Calif.) who was the leader of Japanese-bashing by Congress during the 1980s, Dobbs further discusses the sale of Unocal to CNOOC in the context of a strategic error in a war for energy. To further exacerbate the bleakness of selling Unocal the article also points out that the U.S. would suddenly lose control of the Alaskan oilfields, that the Chinese would become highly opportunistic in terms of raising oil prices, and finally, selling Unocal to a Chinese-led corporation is tantamount to handing over trade secrets. Dobbs relies heavily on fear, uncertainty and doubt (FUD) to fuel the debate over not selling Unocal to CNOOC, despite the potential return to shareholders and the fact that China is the world's leading consumer of oil for production today. This fact alone speaks volumes to their need to drop the cost per barrel of oil to continually stabilize their currencies as their economy grows nearly 10% every 90 days during this period of 2005. Mr. Dobbs relies on FUD along with a healthy dose of nationalism to argue against increasing global shareholder value and in turn driving down the costs of energy.