The ports issue: America’s emotional response to the cartoon riots
In some important ways, the ports issue is America’s response to the cartoon riots of the Arab and Muslim world.
The Dubai Ports deal to purchase UK-based Peninsula & Oriental is very old news. NYT, 11/30/05:
Dubai to Buy P&O, British Shipping Line, for $5.7 Billion
LONDON, Nov. 29 – Dubai, the upstart sheikdom of the United Arab Emirates, agreed Tuesday to purchase the storied British shipping company Peninsular and Oriental Steam Navigation for £3.3 billion ($5.7 billion), strengthening Dubai’s position as a center of commerce and transport….
P&O headquarters will remain in London, and P&O’s chief executive, Robert Woods, will stay on in that role. P&O board members are recommending the offer, and it is expected to close in the first quarter of 2006. P&O was advised by Citigroup and Rothschild.
Dubai, the second largest of the seven emirates, has been a growing presence in European deal-making in recent months, as it furthers plans to diversify away from oil. In March, Dubai International Capital, the investment arm of Dubai Holding, purchased the owner of the Madame Tussauds wax museum for about $1.5 billion. In January, it took a $1 billion stake in DaimlerChrysler.
Here’s the P&O press release of 11/30. Here’s an announcement of publicly available tender offer material in December. Here’s P&O’s letter to shareholders recommending the deal on January 20, 2006. Here’s the January 12, 2006 article in the Wall Street Journal called Investors Expect Battle for P&O:
Smelling a battle between a pair of rich bidders amid a boom in cargo volume, investors pushed shares of port operator Peninsular & Oriental Steam Navigation Co. of Britain up 6.3% Wednesday after PSA International Pte. Ltd. of Singapore said it might make a bid for it at as much as £3.54 billion ($6.25 billion).
PSA, a unit of Singapore’s state-owned investment company Temasek Holdings Pte. Ltd., said after the London market closed Tuesday that it could pay as much as 470 pence a share for P&O, as the company is known. That would trump a bid of 443 pence a share, or £3.3 billion, that Dubai Ports World, of the United Arab Emirates, made in November and that P&O’s board then recommended to its shareholders….
P&O operates at 29 ports around the world, including Baltimore, Miami, New Orleans and Newark, N.J., where it has a 50% stake in the Port Newark Container Terminal. Neither PSA nor Dubai Ports has a presence in the U.S.
It has been known for months that Dubai was purchasing P&O, and the P&O operated major ports in the US. So what’s the big deal now? Well, the port security issue has been out there for some time. And people in New York know that the World Trade Center was owned by the Port Authority of New York and New Jersey at one point, so there is probably emotional resonance there. However, we think there is more than meets the eye in this newly discovered controversy.
We think that one of the key things that has changed now to inflame this issue is the cartoon riots we have observed over the last few weeks. Americans have seen out-of-control Arabs and Muslims threatening mayhem and slaughter over some stupid cartoons. They have seen the Arab and Muslim governments either instigating the riots or unable to control the marauders. They have seen a craven response by the MSM and a feckless mealy-mouthed response from the US government over wanton destruction and threats to life and limb. And the American people are now saying: screw this!
The last thing Americans want is to be told they must be sensitive and trusting and understanding, and these are really our allies and so forth. The outpouring of outrage from the Left and the Right has opportunistic elements of course, but beyond that we sense that the American people are fed up with being told they have to be sensitive to the wishes of the Arab and Muslim world — a world in which the man-in-the-street appears to be either directed by anti-American forces, or so out-of-control that he will take it upon himself to kill Americans any way he can. So there is outrage, and anxiety too, that the kind of people who will threaten murder for the silliest of reasons — and those who fail to denounce them in the strongest terms — must never be trusted or put in charge of anything critical to America.
Dubai Ports World has found itself in the wrong neighborhood at the wrong time. Perhaps the Bush administration can change matters, but, for heaven’s sake, it ought to realize that it is not simply dealing with a business issue, but with Americans’ anxiety and pent-up anger. That anxiety and anger have been looking for a reasonable outlet, and the ports issue fits the bill precisely.
UPDATE
For a good sample of the intense emotions surrounding the ports issue, see TKS; this passion is about more than simply the ports issue itself.
UPDATE II
Best title for an article on this issue that we have seen: “‘Dubai Ports World’ is Arabic for Harriet Miers.”
UPDATE III: Our view
Several readers have interpreted this piece as advancing a position against the sale of P&O to Dubai Ports World. That is an incorrect reading; the purpose of this piece is to explain a bit about the intense emotion surrounding the transfer in ownership of a foreign holding company that nobody on earth cared about a month ago. Based on what we know, we do not oppose the sale.