Nippon is Not the Future of U.S. Steel

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U.S. Steel (USS) CEO David Burritt and Nippon management continue to demonstrate their single-minded pursuit of an unsalvageable deal and, as a last resort, they have attempted to sue their way into a merger.

President Biden blocked the U.S. Steel-Nippon deal on national security grounds on Jan. 3, and his administration directed USS and Nippon to permanently abandon their transaction by June 18.

President Trump, who also consistently voiced his objection to Nippon’s acquisition of USS for more than a year, took office on Jan. 20 and repeated his objections, also for national security and economic reasons. At a White House press conference on Feb. 7, President Trump declared that Nippon had dropped its proposal to own USS and would instead invest in the company.

Yet, perhaps unsurprisingly, Nippon and USS continue to pursue their original deal, lobbying the administration and seeking to draw out their unfounded, retaliatory lawsuits by challenging the national security decision and suing President McCall for standing up for USW members.

Nippon’s acquisition of U.S. Steel has been risky from the beginning, and those risks continue today. Nippon representatives made it clear the company would follow Burritt’s plans to move investment and production from our mills to Big River 2 in Arkansas.

Nippon promised to invest in our facilities, which were riddled with their right to cancel those investments, including if we decide together to strike at contract expiration on Sept. 1, 2026, or if the company locks us out.

And, as a serial trade cheater, Nippon would continue to undermine our domestic steel industry, but would this time do so from inside, compromising America’s need to meet its national security and critical infrastructure needs.

SCORCHED EARTH CAMPAIGN CONTINUES

Over the past year, we’ve been subjected to a barrage of ads, emails, letters to our homes, and more, all in a relentless pressure campaign by their army of lobbyists and PR hacks.

Now, USS and Nippon have hired high-priced lawyers in an attempt to sue or punish anyone who voiced concerns about the deal.

You should rest assured that this scorched-earth legal campaign does not cause any fear for this union. We’ve fought and won bigger fights before.

Burritt stood to gain more than $70 million with the closing of the deal, helping to explain why he’s been more committed to trying to sell the company than actually running it. And while this potential windfall helps explain his attempts to bully his way into a sale, it’s clear he’s never shared our commitment to steelmaking.

For years, he demanded concessions from us while USS was profitable; our strength beat him back every time. His response to our legitimate concerns about Nippon and its impact on our facilities and communities was to first threaten and coerce us, and then to hire lawyers to defend the deal at all costs.

USS’S FUTURE

We have said all along that with responsible management, USS can remain a strong and resilient company.

Recently, an investor called Ancora challenged U.S. Steel management by offering a new slate of directors for the U.S. Steel Board.

Ancora has increased its holdings of USS stock, identified a qualified and experienced steel industry candidate for CEO to replace Burritt and proposed a new operating and capital plan. Ancora has asked U.S. Steel’s stockholders and the current Board of Directors to weigh their fiduciary obligations and consider its plan.

We will continue to carefully scrutinize every aspect of Ancora’s plan. But, here is what Ancora has said so far:

Ancora publicly indicated that it intends to sell the Big River facilities, which are and have been a threat to our facilities from day one. From the sale, it will invest in and maintain the Mon Valley, Gary and Granite City blast furnaces, including relines.

The plan includes a new continuous casting and rolling facility in the Mon Valley and a cogeneration facility. It will complete the Gary Hot Mill upgrade and restart a blast furnace in Granite City to produce pig iron and feed the rolling mills. It also commits to maintaining the mines and the tubular facilities.

In April, shareholders and the Board of Directors will have an important decision to make about the future of USS. They will have to decide whether it will be nothing more than a piggy bank for greedy executives and hedge funds looking to cash out – with national security and the good of our communities a mere afterthought – or whether USS will return to being recognized across the globe as an iconic steel company.

U.S. Steel and Nippon announced their deal on the union, you, USS’s dedicated workforce, its investors, and the American public without warning in December 2023. Ever since then, our union’s first and only concern has been the long-term viability of our facilities, and with it, ensuring a strong domestic steel industry well into the future, preserving good, community-sustaining jobs and providing a critical foundation for America’s national and economic security.

Rest assured, we intend to continue that fight for as long as it takes.

Mike Millsap
District 7 Director & Chairman of the Negotiating Committee

David McCall
International President