While a proposed $14.1 billion purchase of U.S. Steel by Japan-based company Nippon doesn’t have much love on the national political scene, the company is now rallying for support of the transaction.
“Employees of United States Steel Corporation today will host a rally at the U.S. Steel Tower in Pittsburgh in support of the Nippon Steel transaction,” said a Wednesday press release from U.S. Steel. “Employees will call on elected officials in Pennsylvania and across the nation to recognize the significant merits of the transaction for U.S. Steel employees, communities, customers, and American steelmaking.”
This rally was scheduled for 1 p.m. ET.
U.S. Steel has made steel in Pennsylvania since 1901 and it is headquartered in Pittsburgh, Pa. In its more than 120-year history, the company has – in its words – built America. Iconic U.S. Steel work can be found at the San Francisco-Oakland Bay Bridge, the Willis Tower, the New Orleans Superdome, the United Nations Building in New York City, the U.S. Steel Tower in Pittsburgh and more.
If the deal with Nippon doesn’t go through, “serious questions,” will be raised about whether U.S. Steel will remain headquartered in the Steel City, said the company. Despite its long history, the company lost money for a decade before COVID-19 restrictions hit in 2020 due to high costs and low steel prices, according to The Wall Street Journal. With those losses came reduced spending on maintenance and equipment upgrades.
According to the U.S. Steel press release, U.S. Steel will have to pivot away from blast furnace facilities if the deal doesn’t go through. That in turn is expected to put thousands of good-paying jobs at risk and impact the American steel industry at large, particularly its ability to compete globally.
Even as U.S. Steel has faced tough times financially, a 2023 economic impact study showed that its Pennsylvania operations still generated $3.6 billion in total economic impact, “supported and sustained 11,417 jobs through its operations and purchases from the local supply chain and generated $138.2 million in state and local taxes as a result of operations and capital spending,” the company said.
Nippon also traces its history back to the turn of the 20th century. Last December, the company announced that it would acquire U.S. Steel. Following the announcement, the United Steelworkers union slammed the plan in a press release.
“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 workforce and sell to a foreign-owned company,” said the statement from United Steelworkers (USW) International President David McCall. “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.”
As of Wednesday, both major party candidates – Democratic Vice President Kamala Harris and former President Donald Trump of the GOP – both opposed the deal, according to CNN. Sitting President Joe Biden and Ohio Sen. JD Vance, Trump’s running mate, were also opposed to it. In fact, a source told Reuters Wednesday that Biden planned to block the deal.
“U.S. Steel should remain American owned and American operated,” said Harris during a Labor Day visit to Pittsburgh.
Nippon released a Wednesday press release regarding its plans for the transaction, including an outline of a proposed governance policy. This policy stipulates that U.S. Steel will remain a U.S. company owned by New York-based Nippon Steel North America (NSNA), Inc. It said that corporation has operated in the United States for over 50 years and that it employs 2,500 people, including 620 members of the USW union.
Under NSNA, U.S. Steel will remain headquartered in Pittsburgh, said Nippon. It also said U.S. citizens will make up the majority of the company’s board of directors and that U.S. citizens will make up the core management of the company.
“Nippon Steel will prioritize production at U.S. Steel to meet the demand in the U.S. steel market,” the company explained.
Furthermore, Nippon plans to invest $1.4 billion in USW-represented facilities as well as $1 billion into Mon Valley Works and to revamp a blast furnace in Gardy Ind. Per the governance plan, there will be no transfer of U.S. Steel’s production capacity or jobs outside of the U.S. and no layoffs, plant closures or idling of U. S. Steel facilities as a result of the transaction, subject to certain exceptions agreed upon with the USW.
“Nippon Steel continues to believe that the Transaction will enhance American national security by reinforcing U. S. Steel and its domestic production capabilities, bringing cutting-edge technologies into the United States, and ultimately making the American industrial base and supply-chain more resilient and better positioned to compete against future pressures from state-supported Chinese competitors,” said Nippon’s press release.
Former Allegheny County Executive Rich Fitzgerald discussed Nippon’s pledge to invest in the Mon Valley facility with KDKA Newsradio’s the Big K Morning Show
“Let’s get to the table and figure out a way to make those plants and make the company strong for the future,” said Fitzgerald.
This April, U.S. Steel stockholders approved the Nippon transaction. The following month, Nippon Steel and U. S. Steel announced that they had received all regulatory approvals outside of the U.S.
“Today’s rally is about displaying support for the transaction with Nippon Steel. We want elected leaders and other key decision makers to recognize the benefits of the deal as well as the unavoidable consequences if the deal fails,” said President and Chief Executive Officer of U. S. Steel, David B. Burritt, Wednesday.