USW leaders and lawmakers across the political spectrum were united in voicing their disapproval when U.S. Steel announced in December that Japan’s Nippon Steel Corp. was planning to purchase the iconic American company for $15 billion.
“To say we’re disappointed in the announced deal between U.S. Steel and Nippon is an understatement,” International President David McCall said when the bid was announced on Dec. 18. “It demonstrates the same greedy, shortsighted attitude that has guided U.S. Steel for far too long.”
Fighting for Jobs, Benefits
While the union voiced its strong objections to the planned acquisition, McCall assured members and retirees that the union would fight with every tool at its disposal to protect good jobs, benefits and retirement plans.
“Our union intends to exercise the full measure of our contract to ensure that whatever happens next with U.S. Steel, we protect the good, family-sustaining jobs we bargained,” McCall said. “We also will urge government regulators to carefully scrutinize this acquisition.”
Nippon Steel is Japan’s largest, and the world’s fourth-largest, steel company, with an annual output of more than 44 million metric tons. By comparison, U.S. Steel’s output in 2022 was about 14.5 million metric tons.
Supporting Cliffs Bid
McCall pointed out that U.S. Steel management failed to consult with USW members before moving ahead with its plans.
“Neither U.S. Steel nor Nippon reached out to our union regarding the deal, which is in itself a violation of our partnership agreement that requires U.S. Steel to notify us of a change in control or business conditions,” McCall said. “We remained open throughout this process to working with U.S. Steel to keep this iconic American company domestically owned and operated, but instead, it chose to push aside the concerns of its dedicated work force and sell to a foreign-owned company.”
In January, less than a month after U.S. Steel announced the planned sale, the USW filed grievances against the company, in part because of management’s failure to live up to its obligation to notify the union.
U.S. Sen. Sherrod Brown of Ohio agreed and said that if U.S. Steel must be sold, the winning bid should go to Ohio-based Cleveland Cliffs, which announced an effort, with the strong support of the USW, to purchase U.S. Steel after the 123-year-old company announced in August that it was on the market.
“Nippon and U.S. Steel have insulted American steelworkers by refusing to give them a seat at the table and raised grave concerns about their commitment to the future of the American steel industry,” Brown said.
In a letter to members at U.S. Steel, McCall and District 7 Director Mike Millsap noted that the company has a history of broken commitments, including shutting down steelmaking and other operations at Great Lakes and Granite City. U.S. Steel also broke a promise of more than $1 billion in new and updated technology in Western Pennsylvania, and instead purchased Big River Steel.
USS has shut down the East Chicago Tin Mill, the UPI Tin Mill and idled tin operations at the Gary plant. In addition, the company shut down Lone Star Steel, the Lorain, Ohio, plant and coke batteries in Clairton, Pa.
Rather than changing course, Nippon intends to follow the current U.S. Steel business plan, McCall said.
National Security Concerns
In addition to the issue of jobs, shifting ownership of U.S. Steel, once the world’s most valuable company, outside the United States raises national security concerns, given the need for steel in infrastructure, military and defense applications.
For their part, many government officials reacted with similar skepticism when they learned of U.S. Steel’s plans, echoing the USW’s concerns about jobs as well as economic and national security.
U.S. Sen. John Fetterman of Pennsylvania, a longtime USW ally whose home sits across the street from the entrance to U.S. Steel’s Edgar Thompson Works in Braddock, Pa., said he would work vigorously to prevent the sale.
“It’s absolutely outrageous that U.S. Steel has agreed to sell themselves to a foreign company. Steel is always about security — both our national security and the economic security of our steel communities,” Fetterman said. “I am committed to doing anything I can do, using my platform and my position, to block this foreign sale.”
Fetterman’s fellow Pennsylvanian, Sen. Bob Casey, also voiced strong objections to the sale, as did a group of Republican lawmakers who wrote a letter to Treasury Secretary Janet Yellen asking her to actively oppose the acquisition.
The government “can and should block the acquisition of U.S. Steel by NSC, a company whose allegiances clearly lie with a foreign state and whose record in the United States is deeply flawed,” a group of three conservative Republican senators wrote to Yellen.
Dan Simmons, president of Local 1899 at U.S. Steel’s Granite City Works in Illinois, said he initially hoped the potential sale would bring a “fresh vision” to the company, but the Nippon acquisition did not present that opportunity.
“This entire process was not conducted as it should have been, but rather in typical USS fashion of keeping the union in the dark,” Simmons said. “We now find ourselves facing a new owner with the same USS leadership and business plan that, frankly, got us here in the first place.”
In addition, McCall said, trusting an iconic U.S. company to overseas control raises concerns about fair trade. The United States currently imposes 12 different anti-dumping tariffs on Japanese steel, McCall said.
U.S. Steel, he said, “has been an active participant in these anti-dumping cases. We should question if Nippon Steel gets control of U.S. Steel, it could use its status as a ‘domestic producer’ to work against the trade cases from the inside,” he said. “Nippon Steel could order U.S. Steel to change its longstanding position.”
Regulatory Review
Still, the agreement between U.S. Steel and Nippon is not yet a done deal. Federal regulators, including the Committee on Foreign Investment in the United States, which includes leaders from the Departments of Defense, State, Homeland Security and Justice, will review the bid, as will President Joe Biden.
Lael Brainard, director of the National Economic Council, said the president “believes the purchase of this iconic American-owned company by a foreign entity — even one from a close ally — appears to deserve serious scrutiny in terms of its potential impact on national security and supply chain reliability.”
Regardless of what the future holds for the company, McCall vowed that the USW will continue to fight to make sure that its owners live up to their obligations to workers and retirees.
“This includes not just the day-to-day commitments of our labor agreement but also significant obligations to fund pension and retiree insurance benefits that are the most extensive in the domestic steel industry,” he said. “No union has actively engaged in more acquisitions in its core industries than the USW, and rest assured, our union will hold management at U.S. Steel accountable to every letter of our collective bargaining and other existing agreements.”