Cleveland-Cliffs Inc. (CLF) Earnings Call Transcript & Summary

Welcome, everybody, to Cleveland-Cliffs press conference today. We are going to have our Chairman, President and CEO, Lourenco Goncalves, speak. After him, he will introduce Senator Bernie Moreno from the State of Ohio. When we're completed with their remarks, I'll come back, and we will open up for questions with the media. Thank you. I will now turn it over to Lourenco.

Thank you, Pat. Good morning, everyone. It's a great, great pleasure being here with you this morning to talk about what's going on in this country. And what's going on is beyond exciting. This is a dream coming through. What's going on right now is one of the most important things that has never happened in the history of this country. But before we even start, I need to acknowledge a few presence. The first one is my dear friend, U.S. Senator from Ohio, Bernie Moreno, my friend, my partner, fellow American, fellow immigrant like me, American by choice, like me. I also would like to acknowledge Cliff Babcock of Junction Auto Family. Cliff, where are you? Cliff supplied these 2 beautiful General Motors vehicles that you see here at my left side. These 2 vehicles have more than 1,000 pounds of Cliffs' steel on each one. I also would like to recognize [ Brian Pentek ]. Brian brought to us these 2 great cars, a beautiful truck and a beautiful Toyota Camry. By the way, Toyota North America is a real American company employing American workers. These 2 cars have a lot of steel, more than 800 pounds on the Camry and more than 1,000 pounds on the truck. And by the way, we have more than 120 cars that have a significant portion of Cliffs' steel that are built in the United States. We selected 50, the 50 that have the most from the clients that buy a lot of Cliffs' steel to put in the cars. And these are the cars that I would like my employees to buy, because the revolution that's going on will be fueled by consumers, American consumers, doing the right thing. So the program that we have put in place today is very simple. It's a talk of appreciation to what President Trump is bringing back to America. And he's bringing back to America the American dream, because the American dream is not buying cheap stuff on Amazon. That's a convenience, and that was enabled by a lot of things, a lot of the wrong things. Now we are bringing things back to the way they should be. They should be cheap, but it should be cheap because they are reasonable. We can't understand the car manufacturers moving parts across the border between the United States and Mexico 7x or 8x before the final vehicle is assembled. This is crazy. This is stupid. This is not supply chain. This is bad management. We want them to build cars in America using American steel, employ American workers, fortify a middle class that is able to afford things and be able to buy things, paying the right price. We are not going to create any type of inflation. This is all baloney. It's not going to happen. You guys know that steel prices already went up without us doing anything other than the market being the market, the capitalism working for the people that should work you, not for the billionaires. So the steel price went up. Last year, last quarter, your steel sold for $600 per ton. Right now, it's selling for $900. That's a 50% increase in price. And then you say, we agree to a 50% increase in prices, you were saying that's a good thing. Yes, it's necessary, because, at $600, you guys saw we had a big loss in Q4 because it's below our cost of capital. It's below our ability to keep you guys employed. So why you guys are not unemployed? Because I made the decision not to fire anyone. And I took it on the chest on behalf of the Cliffs shareholders. And I appreciate the support that shareholders continue to give to me. But that's not a decision that CEOs normally do, taking a loss to keep people employed just because best days are ahead. I knew that best days were ahead, and I decided to keep my employees ready to grow. We are ready to go. We are ready for the manufacturing revolution that President Trump is bringing. It's so simple. If you want to avoid penalties, if you want to avoid tariffs, if you want to do well for the American people, build things, produce things, manufacture things in America. You can do it at General Motors. We can do it at Toyota. We are very welcoming people. A guy that was born in Brazil like me and our guy that was born in Colombia, like Bernie Moreno, we are very grateful. Therefore, by the grace of God, we were able to come to this country and be able to raise our families in this country. And my kids and my grandkids and maybe more grandkids are on the way, they will be American and they will be in this blessed land. But we need to do our part. And that's what we're doing. So every employee that buys a car that has a meaningful tonnage of Cliffs steel will receive $1,000 payment back, like a bonus. This as a token of our appreciation. And just for your information, with 35 minutes of the news out for you guys, we already had 3 inquiries -- not inquiries, 3 real with documentation, backed by documentation, everything good to go, and more than 23 inquiries. 1 minute before we started, Paul said that we already had 6 inquiries of the -- lost track because there's too many, in the hundreds. So our employees are embracing the thing and embracing very quickly. That's great. You have a lot of models to pick from. Just don't pick a truck that has aluminum. I don't like it. It's bad. We want steel, and we want good steel. Don't pick an imported car. Pick an American-made car. It's as simple as that, because these are the cars that generate your jobs, that will make the Big 3, Big 4, Big 5, because I include Toyota in the Big 3. I include Honda in the Big 5. So these folks need to build more and more cars in America, not in Mexico, not in Canada, not abroad, right here, employing our people to be generating the jobs that make you guys consumers. And then everything will be fine. Prices will go to where the prices should go. I gave you the 50%. Now let me give you another number for you to have in mind. And the press, please pay attention to that. The $300 increase increases the price of the car by $300. Why is that? Because you heard the numbers I gave. One car has 1 ton of steel or less. That Toyota Camry out there has 0.9 tons of steel on it. So let's call it a Toyota to make it simple. $300, the average price of a car is $50,000. So $300 on top of steel per car, the car itself, $50,300 more, is a 0.6% increase, less than a 1% increase for the dealers associations that are here. I appreciate you guys coming -- less than 1%, less than 1%, $300. So where are the $10,000 that the car manufacturers are saying that the truck tariffs will bring to the price of cars? In their minds. These numbers don't exist. This is a freaking absurd number that makes absolutely no sense. But if they believe that their no sense will fly, try again. They're not dealing with people that live in La La Land. They are dealing with Donald Trump, Howard Lutnick, Jamieson Greer, Scott [ Dassent ], Bernie Moreno. These are people that they know math. They know numbers. And more than anything, they want what's best for the American people. What we are doing today is small, but I hope it's the spark that will ignite other companies, other businesses, even the government, to provide subsidies to the people to let them move toward buying American-made goods. CEOs only understand the power of 1 thing, and that's the power of the people, we, the people. That's we, and that's what we are doing today. With that, I would like to introduce my friend, Bernie Moreno, to say words that I'm sure that you will enjoy.

Thank you, Lourenco. And thank you to all of you for the hard work that you put in. I want to introduce my wife over there. Bridget, raise your hand. That's my wife, Bridget. As I told Lourenco on the way in, my wife said that she worked at a steel mill in the summer when she was a kid, and this place is dramatically cleaner than the place she worked. Her dad was a steel worker his whole life. He graduated from high school, reported to Gary Works the next day and worked there his whole life, at the end of his career, worked for AK Steel for a little bit and was very unhappy with the way the place was managed before Cliffs bought it, so he retired. But in the meantime, he was able to raise 3 kids, own a home, own a car, and is now completely debt-free and living a nice life. That's the American dream. And that's what's been under attack. This idea that we can just ship our industrial base overseas, have China make our steel, have Japan make our cars, have Mexico make other products, and we're just going to be a consumer society>? Does that make any sense to any of you? And then when you hear the Democrats say, well, look, we shut down your steel mills because we can buy subsidized steel from China cheaper, then all you need to do is go get retrained. Go be tech coders. That's the mentality that's got to change, and that's what we are changing. Look, the jobs that you have allow you to provide for a good middle class life. Owning a car and owning a home shouldn't be out of reach for Americans. You should be able to take a vacation every once in a while. You shouldn't worry about what retirement is. And I think one of the biggest changes that President Trump has brought to the Republican party is this idea that there were Republicans that were against unions. That's not the case at all. The reality is if unions are going to be a force to help lift up middle-class people, all for it. I'm all for making certain whatever we do that allows us to work for average Americans for middle-class Americans, like the rich people, they don't need to help. They are good. We need to be advocates for the working class. And I applaud Lourenco for what he's doing here. The $1,000 will make a difference. And I want to also introduce -- where'd he go? Zach Doran, if you could raise your hand? Stand up and raise your hand. He came all the way from Columbus. Thank you, Zach. Zach runs the Ohio Auto Dealers Association. And so I've asked him and his members, and you can see 2 of them are already stepped up in a big way, that when a Cliffs employee walks into any auto dealership in Ohio, that they take special care of them. If there's something special they can do for them that would be above and beyond what they would do, it would be fantastic, because, look, we got to get car prices down. We're working on that in Washington, D.C. And part of the way we're going to do that is stop forcing everybody to buy electric vehicles. If you want to buy an EV, absolutely, you should, but the government shouldn't be forcing you into buying electric vehicles. And we talked about this $1,000 incentive from Cliffs. It's fantastic. I want you to know how crazy things have been in the last 4 years. If you walk into a Rolls-Royce dealership, by the way, which I used to own, so I'm saying this out of pure knowledge, you can get $7,500 from the federal government if you lease that car that has 0 U.S. content and is $0.5 million. Process that for a second. Your government is giving multimillionaires $7,500 to lease an electric Rolls-Royce. How does that even make sense? How do you even justify that? So we're going to get rid of that, make certain that we're not in the business of deciding which cars people should buy. We're going to unleash the marketplace. We're going to make certain that we have 1 federal standard for emissions that we set for 10 years to give the car companies the certainty they need because, at the end of the day, here's what we're after. We can no longer shift our industrial base overseas. In fact, we're going to do the exact opposite. We want more things made in America. And I -- in fact, I told Lourenco I've been texting with Mary Barra and John Elkann who runs Stellantis worldwide and Jim Farley to show them what Cliffs is doing. I'm hoping other companies step up and do the same thing. If they sell cars here in America, they sell cars here in America, where should they be made? In America, right? That's not -- that shouldn't be controversial. That shouldn't be very complicated. And right now, the number is 4 million cars are sold here that are made somewhere else. Imagine what the impact would be on our communities if those 4 million cars came back. Imagine what it would look like for all of you. I told Lourenco the goal is, in 4 years, for this place to be bursting at the seams. He said he has about 3,000 more employees in Indiana than Ohio. So now I know what I have to work on is to make sure, at the end of my first term, which is 6 years, that we have at least 4,000 more employees in Ohio than we have now, right? We can make that happen. Certainly, we can make it happen if we stop having Japanese or Chinese steel go into cars made in Mexico that are being shipped and sold here, because the cars that are made here, they're going to have Cliffs steel. So that's our goal. And I'll leave with this. It is something that press misses. Why does this matter? We understand why it matters to all of you, but why does it matter to the country? Very simple. If you look at when World War II happened, right? Japan hit Pearl Harbor, the Germans invaded Europe. America got drawn into that war. We didn't have better technology than Germany or Japan. They had actually the superior technology. So the question became, well, then how did America and America uniquely and alone win World War II? It wasn't our allies that won. It was the United States of America that made that war victorious. Why? Despite not having the same advanced technology that the Germans and the Japanese had, you know what we could do? We can make a lot of shit really fast. And it was the auto industry and the steel industry that stepped up and made tanks and planes and bullets and ammunition that allowed us to win that war. Think about where we are today, where we've guided our industrial base. If, Heaven forbid, any other conflict like that ever happened, we don't have the industrial might we once had, and we're going to change course on that. We're going to change course on it really, really fast. Now there's some -- also a conversation about President Trump's tariffs with Mexico and Canada. Let me explain that. And I'll raise my hand. I'm somebody who knows a close family member who has died of fentanyl poisoning. I think I'm not going to ask all of you to raise your hand, because I know the answer. It's 100,000-plus Americans every year that die of fentanyl poisoning. These are not drug addicts. These are kids that may take a pill that maybe they thought there would be -- I'll do it 1 time and that pill's laced with fentanyl. Where is the fentanyl coming from? Canada and Mexico. They say they're our friends, and we like Canadians. We like people from Mexico. It's not who we like or not like, but if you're going to be our ally, are you -- why are you allowing fentanyl to come into our country that kill over 100,000 Americans per year? Friends don't do that. By the way, friends that we pay for 100% of their defense. We pay the entire cost of defending Mexico and Canada. They rip us off to the tune of $300 billion a year in trade deficits. Like, if that's not enough, then they're letting insane amounts of fentanyl ship into our country that kills 100,000 Americans. Joe Biden did nothing about it. President Trump is saying, hey, look, that's going to stop. And I applaud him for doing that. I get a lot of questions from reporters. Yeah, but you're not concerned that these tariffs will raise prices? Are you not concerned with the impact on Americans? I said I'm concerned about the impact that 100,000 fentanyl poisonings have on the families. And if you know somebody, you know it's a life sentence. You lose a 22-year-old son or a 18-year-old daughter to fentanyl poisoning, or a mom or dad, you don't get over that. That's with you for the rest of your life. All we're saying to our neighbors is, hey, look, stop. I had a whole Canadian delegation visit my office this week. They're like, oh, you know, we're friends. We love you and Americans. Okay, I said all that is irrelevant. Stop shipping in fentanyl. You know what they said? Well, we don't ship in a lot. I said, well, how much do you think is acceptable? Do you want me to go tell the families of people in Ohio whose kids have died you said, well, you know, it was only just you and 4,000 other families, it's not a big deal. It's ridiculous. And you've seen, hopefully, Canada and Mexico do more, but they have to do even more. And so I 100% applaud President Trump for doing that. And it's not our decision now. This decision is squarely in the hands of the leaders of Canada and Mexico. If they want to stop the flow of fentanyl, wipe out the drug cartels, wipe out the fentanyl labs, that's on them. If they want us to help them, our military is ready to go. Call us in and we will wipe these drug cartels off the face of the earth. But ultimately, that's what's going to have to depend on these tariffs. And the last thing I'll say is, again, I'll repeat what I said earlier. To the car companies, whether it's Toyota, Stellantis, General Motors, Ford, you sell a car here, you're going to make it here. That's extremely important for us to get there. So thank you to the auto dealers for stepping up. I think they're going to take very good care of you guys. I'm hoping that other companies get motivated to do something similar and that we allow this auto renaissance to happen here in America. Lourenco, I applaud you for your leadership. He's been a great voice in Washington, D.C. to really talk about why it's so important that we continue on this path to protect our steel industry. Lourenco knows these numbers off the top of his head. China now makes 60% of the world's steel. They want to take over the entire -- the Chinese won't be happy unless this plant is completely closed and we're buying Chinese steel. And over our dead bodies will we ever allow something like that to happen. So thank you, Lourenco.

Thank you. And look, this is just perfect. That's exactly what we need to hear from our U.S. senator, our Ohio -- the man, together with John Husted, that are representing us in Ohio. Ohio has a great moment right now. The Vice President of the United States. J.D. Vance, who is our friend, he is from Ohio, from Middletown, Ohio, the biggest producer of automotive steel in the country. His grandpa that raised him retired working for AK Steel prior to our acquisition. So J.D. Vance, nobody needs to explain to Vice President J.D. Vance what just explained so eloquently. He knows because he grew up right there, and he saw by himself. So nobody will ever be able to convince J.D. Vance otherwise. One last thing, because you guys hear -- the press hears a lot and the press was -- the press is -- because they repeat over and over again, and I repeat it over and over again, it does not become true. It's still a lie. Let's talk about technology. The most modern galvanized plant producing structural steels for a car in the entire world is located right here in this plant, Cleveland Works in Cleveland, Ohio. One more for you, because that's been repeated a lot, the second and last and then we will open for Q&A, Pat. Technology, there is 1 company that we know of that tried hydrogen and blast furnaces in industrial scale in the entire world, and that's Cleveland-Cliffs. And we did it twice, once in Middletown and once in Indiana Harbor. I tested in this [ smallest ] blast furnace that we have. That's Middletown. It worked. Then I tested in our biggest blast furnace. Indiana Harbor #7 was the biggest blast furnace in the Western world. We've -- successfully in Middletown, successfully Indiana Harbor, we built a definitive pipeline to feed hydrogen to Indiana Harbor. Then we tested it again, success. We shut it down, and I waited for hydrogen coming from the former President Biden that never came. So I never used it. Now [indiscernible] trying to come to the country, that are coming, and saying that they have hydrogen. They do not. They only have lab trials. They never had the courage to do what we did at Cleveland-Cliffs. We put in real life because they're afraid that they would explode their blast furnaces. We proved it that it doesn't explode, and we can produce integrated steel generating no CO2. So -- but then we stopped because there is no hydrogen. If, one day, we have hydrogen, I want you to know, Bernie, we are ready. With that, I will open for questions for both of us.

Very good. So we'll take questions from the media here on site, and we might have a virtual question or two. So let's start with Cleveland Plain Dealer.

My name is Molly. I'm with Cleveland.com [indiscernible]. I just want to start and say thank you both so much for your time today. Senator Moreno, I just have a question for you. So President Trump, as you know, gave the auto industry this 1-month delay from tariffs. I'm wondering if you think that should be permanent. Why or why not?

Well, again, it's not on President Trump to make this decision. It's up to the leaders of Canada and Mexico. And if they continue to ship fentanyl into our country, maybe the tariffs will go up to 50%. We're going to punish those countries that allow Americans to die. That's very simple. If Canada and Mexico end the shipment of fentanyl into this country, then the tariffs will end. We're going to make the tariffs reciprocal. So the 25% is about ending bad behavior. But you may know, and this is not very well reported, imagine how stupid you have to be to allow foreign countries to ship things to us tariff-free, and then when we ship our products to them, they tariff us. Like, who would make a deal like that? You have to have leaders that are catastrophically stupid to allow something like that to happen. So we're going to have reciprocal tariffs. So if they want to tariff us, then we're going to tariff them. And if they don't want to tariff us, then we're not going to tariff them. So it's very simple. It's about reciprocal trade. The 25% today that will go up to 50% or maybe even 100% is until they stop killing American citizens. We're not going to put up with that. And by the way, shipping illegals into our country, we've seen -- you saw this at the State of the Union address. Joe Biden allowed 300,000 illegals into this country every single month, 300,000. All the Democrats in Congress said, oh, we've got to pass all these legislation. No, we don't. We just needed a new President. We have border encounters down to a record low, never been this low. We're going to get it to 0, which is what it should be. I mean, how many people do you allow into your home without your permission? Am I allowed to break in your kitchen window and then take your food? I mean, I don't think most of you would greet me that way. I think I would probably be greeted with a piece of steel to my head, right, because you can't break into somebody's home. But America is our home. Why are we letting people break into our home? And I think that's being allowed by Mexico and Canada. So it's on them. It's not on President Trump.

Yes, you would be actually hearing how it would be great to do it with a gun because we are [indiscernible] many people.

Do we have another question?

Nora McKeown, Spectrum News. Can I ask Mr. Goncalves, can you give some more information on how you -- what criteria you used in eligibility for the vehicles' bonus incentive?

I'm sorry, say it again?

Can you give some more information on the criteria and which vehicles are eligible for the bonus?

Sure. Yes. The criteria is the vehicle needs to have a significant tonnage of Cliffs' steel inside. So we selected -- because we sell steel at a significant level to more than 150 vehicles produced in this country. But in order to make it simple for our employees, we went down to 50 vehicles. It's 15 General Motors, 10 Toyota, 6 Honda, 3 Nissan, 4 Subaru, 3 Fords, 1 [ Stellantis ], the Ram, this one, 5 Mercedes, and 1 [indiscernible]. That's it, 50 in total. I'm not going to give you the motors, but our employees will know. I want my competition to know how much steel -- my steel is in the product. So that's a fine line for me to navigate. I'm telling you, it's only the Ram because they became a [ globalist ] company. But the Ram, their best-selling car, they don't have the courage to take our steel out, only the other ones. And Ford, don't buy the F-150. The F-150, we only supply all the infrastructure of the car, the structural steels. The outside of the car for the last 10 years has been aluminum. So we are trying to make them motivated to move back to steel. They moved that to aluminum long ago because gas prices were ramping up. Drill baby, drill is coming. So there's no reason to keep aluminum there. So we're going to be okay there. I hope I answered your question. I'm not going to give you more than that.

50 models is a lot.

There's choices. Look how beautiful these trucks and SUVs and sedans are. We have all kinds, all kinds, even EVs. The Hummer EV is included.

We're going to put Lourenco in the showroom in some of these dealerships, help sell some of these guys.

Not a bad idea.

My name is Annabelle. I am with NBC station WKYC. I would love if you could both talk more about job growth. So you mentioned the 4,000 figure over the next 4 years. But what will job growth look like in the short term, so next year or 2, and then also stretching to 10 years?

Can I take that first? Okay. When President Trump was President for the first time, I made a very complicated move at the time because, at the time, Cleveland-Cliffs was a mining company with $2 billion in revenues a year, $2 billion a year. I made the commitment to build a new plant in Toledo, Ohio to produce direct-reduced iron. That's state-of-the-art. We started 2018. We completed the construction and started the operation in 2020. And I spend $1 billion to build that plant. So it cost our company $2 billion in revenues building a plant that cost $1 billion, not in profits, in revenues, cost $1 billion. That plant is there, is the most modern direct-reduction plant in the entire world. And direct reduction is the next level of production. Why did I make that decision? I made that decision because we had a president that was fully committed to invest in America, invest in American jobs and creating an American market that would buy American products, as simple as that. Unfortunately, he was not reelected, and everything went to a different route. Now he's back. So it's easy to see that we are going to do the same thing again. Late last year, in the fourth quarter, we had a terrible quarter because steel demand was going down and down and down and down. We kept employment. We shut down our glass furnace here that [indiscernible] shut down, but I never let any employee go. And I have my president of the union here, [ Dick Pescar ], and he knows that I -- Dick, please stand up. Dick is the President of the [ 970 ]. So we are together on this, and we will continue to grow plants. Senator Moreno mentioned that we have almost -- 9,853 employees in Indiana. We have 6,500-and-something here in Ohio. I want to build new plants and I want to do it in Ohio. But we need this thing going, and this is a movement that the President and the Vice President and the Secretary of Commerce and the USDR and great representatives of our people like Senator Moreno will make this thing move forward. It's a process. We need everybody engaged, everybody together, and they will do it because it's the right thing to do.

Just to follow-up because, again, you'd have to dig into the media to understand these numbers, President Trump's been in office for less than 2 months, less than 2 months. In that period of time, the border is now completely sealed and secure. We have about under 200 border encounters where we used to have up to 20,000 border counters every day. So the border is sealed. Think about how, in less than 8 weeks, boom. That tells you what happened over the last 4 years is completely intentional. Number two, we've had $1.6 trillion in commitments to invest in America, from Apple to TSMC that makes and manufactures semiconductor chips. You have companies that have already committed $1.6 trillion. I mean, what's going to happen is we're going to see a renaissance in manufacturing in this country like we've never seen, and we need it. We guided our industrial base. Look, you don't -- this is no surprise to anybody in Ohio. Drive to Lorain, Toledo, Youngstown. These were thriving, very successful cities. In fact, I'll give you a stat. Again, you'll never read the news. In 1949, right after World War II, 6 of the wealthiest 14 cities in the entire United States of America were in Ohio. We're barely in the top 50 now. And you know we're the wealthiest cities in America are now? Around Washington, D.C. Where do they make there? You know what they make? Corrupt politicians. They are the manufacturing center of corrupt politicians. Maybe that's why they're so wealthy. We're going to turn that around in a big way and we're going to revitalize this country. And we're going to do it in a very short period of time. As President Trump would say, "You're going to get sick of winning."

I think we have a question back here from John Kosich.

John Kosich from Chanel 5 here in Cleveland. You're heavily more into steel than you were in 2018 when the tariffs went into effect back then. But you saw the impact of the clawback from Mexico, the impact that it had in Canton. What went wrong in '20 with those tariffs? And are you concerned that we're seeing now negotiations on other tariffs, clawbacks and such? Are you concerned? How important is it, if these go into effect, as they will next week, that they stay in effect for you guys to build?

That's a fair question, John, and I appreciate the question. Let's try to explain. I believe that the existing situation with Mexico and Canada, Senator Moreno was very eloquent and very clear on the explanation of the rationale and what needs to be done in order to eliminate those. So I will not even toil there. What I will say is that the fact that we have Mexico and Canada, particularly Mexico, particularly Mexico, being hit with tariffs on a country basis beyond fentanyl is because Mexico invited people to our party. That was not part of our party. Our party was USMCA, U.S. and that's Mexico CA and that's Canada. We never said that others -- that just because they use Mexico or Canada to try and ship or to slightly modify something just to avoid legislation, avoid CBP, Customs and Border Protection, would be allowed into the party. And that's the rationale behind the entire thing. Fast-forward to this tariff that will come into effect next week on March 12, there will be Section 232, national security-based tariffs, on steel. These tariffs are coming in ironclad. This administration, from the President of the United States, Donald J. Trump, the Vice President of the United States, J.D. Vance, Secretary of Commerce, Howard Lutnick, and the United States Trade Representative, Jamieson Greer, they have 0 intention to allow, like the Biden people did for exclusions, exceptions, site deals, things like that -- need to be all over the entire spectrum of steel. We don't need it. We don't want it, and we don't care about everything that's outside of the United States. We are self-sufficient. We produce less steel than we have the market for. We can produce more. We can produce new plants. We can invest. I've proven that time and time again. That $2 billion in revenues that I had when I built the plant in Toledo, last year, it was $20 billion. Even with all the disastrous policies of the Biden administration, we're able to multiply the size of our company by 10x. So imagine what we can do in terms of employment and in terms of wealth for the people if we have an administration that supports us. We'll continue to grow, as simple as that.

And you brought up Republic Steel. So this is a good example, and I'm sure all of you know the story, but it's worth repeating to see if the media covers it. Look, Republic was an American steel company. You may say it didn't do a good job. It doesn't matter. They're an American company. We, meaning the United States government, allowed a Mexican steel company to buy it, and they made all kinds of promises -- see if this sounds familiar -- that they would invest in America, et cetera, et cetera. They took all of the cash out of the company. They physically went into the mills, including the one in Canton, and took the most valuable equipment, shipped it to Mexico. They then built a state-of-the-art steel mill in Mexico, shut down Republic in Canton and the 1 in New York, basically gutted the entire company and now are shipping that steel made in Mexico totally tariff-free into America. What happened to the people who worked in those communities? What happens to the people who worked in those companies? Totally screwed. Was it their fault? No, it's a fault of their government. These are the things that we're never going to allow again. By the way, our great American companies should never be in a position where we have to be bought out or saved by some foreign company. That's insane.

So I know, Mr. Goncalves, you said that, currently, the domestic steel industry isn't supplying enough for the market and tariffs could eventually bring us to a place where that's possible. But Mr. Moreno, are you concerned about the impact that will have on other industries in the immediate future?

No, not at all because, look, you've got to compare where we are, where we don't even make the steel that we need here in America -- so the first thing is to get to the point where every amount of steel that we need to produce things in America, we're at 100%. That's baseline. That's like worst-case scenario, is that we have enough steel produced to satisfy the demand in America. And then the next step is let's become an exporter of steel. We shouldn't be allowing China that produces way more steel than they can consume in their own country -- because what they're going to do is they use government subsidies to make steel -- to sell steel for a lot less money to basically kill their competition. And then once that competition is dead, then they can go and control the entire market. That's true with steel. It's true with semiconductor chips. It's true with energy. Like, we have all the energy resources we need here in the United States of America, but we have allowed foreign countries to do that. For example, in coal, we used to be the largest coal producer in America -- I mean, I'm sorry, in the world, here in America. And now China is. So who do you think makes cleaner coal, America or China? Who do you think is -- do you think the Chinese EPA is stricter than the U.S. EPA? Do you think the Chinese version of OSHA is stricter than the American version of OSHA? We share the same planet. So if you're concerned about the environment, you want more of that to be happening here in the United States. Joe Biden did the exact opposite. He shut down LNG exports. Germany and the Europeans gave more money to Russia for energy than they gave you to Ukraine to help them fight the war against Russia. You know insane that is? They funded the other side of the world while publicly denouncing the fact that we weren't doing enough, we weren't sending enough hundreds of billions of dollars. And then they wanted us to send soldiers. Do you want to send your kids to Ukraine to die there over a dispute about land? I'm not sending my 26-year-old son there. There's no way. So President Trump talks about wanting to do peace there, and he gets lambasted, as if it's our obligation, like it's our duty to send hundreds of billions of dollars to a foreign country. No, it's our duty to make certain that we protect American citizens and that we do what's in the best interest of this country. This is the seismic shift that's happened between November 5 and today. And look, I hope the Democrats become rational. I was at the State of the Union address on Tuesday, and it actually got really uncomfortable. It got uncomfortable because I'm watching the opposite party. And I want them to be thriving. I want a thriving, competitive democrat party to compete with us in ideas. But when you can't stand up and applaud for an 18-year-old kid that just got accepted to West Point, not because he opened the mail, but because of President of the United States -- they did it on national TV. Like, anyone who has an 18-year-old, that's had an 18-year-old, you're going to go, oh, my God, this is an amazing moment. Imagine how confusing it was for him to see that half the room didn't even stand up for a platform. Or a 13-year-old kid that has brain cancer that the Secret Service -- the head of the Secret Service just made him an honorary agent, and he looks down and half the room isn't even standing and applauding for him. They've lost their ever-loving minds. Let's be honest. So look, I hope the Democrats get the memo. Let's work together and solve our disputes within the margin. But ultimately, let's work for the people who built this country. Let's make certain that we protect our middle class, that we grow our middle class, that we provide opportunities, like Lourenco does every single day. And the message to every CEO is, look, if Cliffs can do it, if Cliffs can stop the layoffs or the constant cutting of wages, but rather work for their people to share in the success, so as Cliffs does better, their employees do better, that you get a situation where you have a good, decent life in this country, that's what all of us should be on the same page to do. It's not enough to be just saying, hey, I can work Monday through Friday and barely get by. You've got to be able to know that you can retire at some point. And when I hear my colleagues say, well, we're going to raise the retirement age, those are people who've never left the desk. You may want to retire later, but your body says, sorry, no. So we're not going to raise the retirement age. We're not going to cut benefits to Americans. We're going to keep those benefits intact because we're looking inwardly instead of looking outwardly. That's what the media is knocking us on. And look, I don't have any problem defending our positions to put America first, and that's ultimately what we're going to do.

Yes. Look, let me just do a quick follow-up on what I have just said. I gave you the numbers. I'll give you the numbers again. A 50% price increase, that has already happened. It's not like I'm going to do it because the tariffs are coming, already happened. It's all about the market. Steel went from $600 to $900. That's $300 in a short period of time. Trump is in office less than 2 months. That's what happened. So he already did -- his impact has already been felt. That said, that $300 is the difference between us being able to hire people, pay these people, grow the business, hire more people, hire your kids, and in the future, your grandkids or not, because Middletown won't survive. We don't make money to make payroll, and that's not a way to grow. How much that will impact you? Let's assume I'm going to buy the Toyota Camry. The MSRP says $41,359. You can check that later when we're done because I checked before. So it's less than the $50,000 that I said. So the $300, that's 0.9 tons of steel. 0.9 of $300 is $270. So that thing, you're now going to $42,000. You go to $41,500 or $41,600. It's a rounding error. 50% more [ dealers ] are rounding error, but for you are not a rounding error. Your families, your kids, your livelihood is not a rounding error. But they are so bold, they are so aggressive, they -- now they would like to do it with cars. You guys heard about BYD, a subsidized company by the Chinese Communist Party, trying to sell cars in the United States, cars like that Toyota Camry, for less than $20,000. No car manufacturer will be able to compete. And they say, oh, but they enabled a lot of what happened with steel in the last 3 or 4 decades. Now it's hurting them, because once you create an avenue for illegally dumping stuff, starting with steel, everything else will come through the same door and we are the victims. If you feel like you're not affected, you are. So please think about we are not trying to do that because we are crazy people. We are not. We know numbers and we know the impact on the livelihood of people like yourselves, including members of the press. And I really ask the members of the press, help us broadcast the right message. Put the numbers. When we're wrong, tell us why and we'll correct ourselves. But we are more than 90% right on our direction because our direction is for employment, empowerment of the middle class and creating, again, the ability to have the American dream.

We have time for 1 more question.

I would like to take a quick moment to ask you about the cuts to Veterans Affairs when we were looking at that on the federal level, planned 80,000 cuts. Will you answer or talk to Ohio veterans that are concerned about the impacts to the care they will be receiving, and then also to some Ohio veterans who might have lost their jobs or will lose their jobs as a part of these cuts?

Sure. So not what we're here to talk about, but I'm happy to answer the question. The VA had about 400,000 employees back in 2019. Joe Biden grew the employment to 470,000. So what Doug Collins did -- because the media reports said it's Elon, as if Elon Musk is walking around telling people they're fired, it's insane, he's not doing that at all. So what Doug Collins, who's the Secretary of the Veterans Affairs, said, hey, we rightsize the VA down to 400,000. Our office fields calls from government workers every single day. We have about 2,000 phone calls in Ohio and about 1,500 to 1,600 phone calls in Washington, D.C. that we answer every single day. I'll give you an example. There are times when they get it wrong. And we have a process in place to make certain that, hey, if that happened, like that 1 employee should not have been terminated, we get them right back on, because when you're trying to manage a workforce of 2.2 million people that we can't afford, we have a $36.5 trillion budget, we have to trim the size of the federal workforce, you're going to make some mistakes. I'll give you the example that's not often talked about. I had it come to my office. I had a gentleman call our office and said, hey, I don't think I should have gotten fired. So I said, okay, well, tell me your story. And his job at the VA is to greet people. So when you walk into the VA, he greets them. What do you need? How can I help you? Here's where you go for this. Here's where you go for that. Here's what -- if you need to fill out this form. Kind of this guide, right, at the VA. He said, well, it's a really important job. I mean, if you know anybody who's a veteran, you know how hard that is. In fact, how many of you served this country in the military? Raise your hand. Let's have a round of applause, please. So you know. You know the VA stuff. I mean, we don't do enough for our veterans. We need to make that process better. So I said, well, that's an important job. We've got to make sure we restore that person's job. So I dug into it further. And this particular gentleman lives in Toledo. The VA he's supposed to go to work at every day is in Parkersburg, West Virginia. He hasn't been there in 3.5 years. You can't greet people remotely. That's why he got fired. And by the way, he had a choice, say, look, do your job and maybe we'll transfer you to the VA in Toledo or maybe move closer to Parkersburg, West Virginia. It's like a 4.5-hour drive. And he said, "No, I want to do the job remotely." Well, it's not a remote job. So we also had people who worked for government agencies. Imagine all of you. Imagine if you were allowed to get away with this, that had a full-time job somewhere else. I had a gentleman -- I'll give you an example. He's a pilot that lives here in Cleveland, Ohio, full-time pilot. That's what he does all day, every day. And he's also an employee of the FAA getting a full paycheck and is supposed to be at work every day in Washington, D.C. Would you guys like a government job where you don't ever have to go to work and collect a paycheck? That's insane. Those are the types of things that we're rooting out. And it's completely unacceptable that we have government employees that we've allowed to get away with that. We have a great government employees, but we're not going to allow the good ones to get disparage because we have people like the examples I just gave. And we've got to rightsize the government. Look, any of you think that you pay too little taxes? Would you like to pay more in taxes? No. Would you guys like to send $40 billion a year to foreign countries through USAID, which is the entire budget of the state of Ohio? Do you want -- when you write a check to the IRS or it comes out of your paycheck, would you like it to be used for sex-change operations in Guatemala, DEI training in Ghana? Those are the things we say, my God, thank God I pay taxes to go there. That's insane. We pay for billions of dollars to foreign countries. Like, that's not what I pay taxes to do. We have plenty of need. You could drive a 10-mile radius here and you can go to a lot of places, we have a lot of people that have a lot of needs. We're going to take care of those people with our taxpayer dollars. We're going to do it really efficiently and really well. And I want to just make 1 quick announcement since Lourenco made an announcement, that $1,000 for any Cliffs employee to the 50 vehicles that have Cliffs steel. We're going to introduce a bill on Monday that, if you take out an auto loan and it's for a U.S.-made vehicle, that that interest on that auto loan will be tax deductible, because we need to do everything possible to encourage the purchase of American vehicles. That's the commitment we have from this administration.

Thank you, Senator. I think that's all the time we have for questions today. Lourenco, any concluding thoughts?

Thanks so much, Senator. Look, thank you for coming, appreciate the press coming, covering the event. To my team, hang in there. The bad times are behind us. The good times are now and ahead of us. We are going to grow this business in the next 4 years. We're going to be hiring people. We're going to be -- to continue to be a technologically advancing the company. We don't need to sell any steel company to anyone outside of the United States. We have the technology. We have the resources. We have access to finance. We have everything. We have the best market in the world. And we have a government that understands the wishes of the people. And they are simple. So we have -- for simplification, people that know me, they know that I'm a very simple guy on my line of thoughts. That's what we have now. What's good for you is good for the company, it's good for the country, and that's what we are going to pursue. Thanks again, and have a great day. Thanks.

Thank you, everybody. That concludes our press conference today.