Nippon Steel Corp. is mounting a last-ditch push to muster support for its $14.1 billion takeover of United States Steel Corp., a deal opposed by President Joe Biden, Vice President Kamala Harris and ex-President Donald Trump.
Biden and Harris want the company to remain domestically owned while Trump has flatly said he’d block it. The United Steelworkers union leadership also opposes the deal. But, among other stakeholders and some union members, the view is more mixed — with some supporting the deal because they worry that another buyer won’t match Nippon Steel’s pledges to invest $2.7 billion into some mills.
US Steel closed up 7% in New York on Wednesday after recording the biggest intraday increase since Dec. 18 earlier. Nippon Steel shares rose as much as 2% at the open on Thursday, but had given up almost all of those gains as of late-morning in Tokyo.
Several US and Japanese business groups — including the U.S. Chamber of Commerce and the Japan Business Federation — released a joint letter to Treasury Secretary Janet Yellen, who also chairs the foreign investment committee. “We fear that the CFIUS process is being used to further political agendas that are outside the committee’s purview and putting the US economy and workers at risk,” they said.
Some union members and political figures are expressing support for a deal that otherwise faces staunch opposition from union brass and the highest echelons of American politics.
Many of the rank and file at a trio of plants near Pittsburgh want the deal to go through, Jason Zugai, vice president of United Steelworkers Local 2227, said in an interview. He represents workers at one of three plants in Pennsylvania’s Mon Valley that could benefit as Nippon Steel has pledged to invest at least $1 billion there.
“The deal on the table would solidify the jobs in the Mon Valley for the next 50 to 100 years,” Zugai said.
While some local members favor the offer, the overarching United Steelworkers union opposes the deal.
“The bottom line about this merger is that it jeopardizes national security and critical supply chains,” United Steel Workers President Dave McCall said in a statement, insisting that Nippon’s commitments come with “so many conditions as to make their promises worthless.”
“Now USS and Nippon are politicizing the situation in a last-ditch attempt to save the deal,” he said.
Pennsylvania Governor Josh Shapiro, a Democrat who has neither backed nor opposed the deal, publicly, is acting as something of a mediator behind the scenes. Shapiro’s office said earlier this month he was working “with all parties to find a solution that protects Pennsylvania jobs.”
The White House and Shapiro’s office declined to comment.
In his communication with the administration, Shapiro has not expressed opposition to blocking the sale and has said he supports the steelworkers, according to a person familiar with the matter who also asked not to be identified to discuss the talks.
US Steel has threatened to shutter plants and move its headquarters out of Pennsylvania if the acquisition collapses. But McCall has steadfastly opposed the deal, saying Nippon Steel is refusing to put its parent company’s name on the agreement or offer sufficient guarantees to the union.
“At the end of the day, there’ll still be people around interested in US Steel,” he said in an interview last week.
The company has rebutted that. “There is no scenario where US Steel would make these investments – absent Nippon Steel. A transaction with Nippon Steel is the best avenue to ensure that US Steel will be able to thrive well into the future,” US Steel said in a statement.
US Steel and Nippon Steel took the extraordinary step Wednesday of publishing their private correspondence with the union, saying they want to fight “public mischaracterizations of our communications with the USW.”
Mori, in a Sept. 3 letter to McCall, said: “Personally, I remain convinced that, if you and I can partner together, we can achieve amazing results for US Steel and the USW’s membership.”
“We’re confident that Nippon Steel’s acquisition of U. S. Steel will benefit American workers, local communities, and national security in a way no other alternative can,” Nippon Steel said in a statement.
US-based Cleveland-Cliffs Inc. has expressed interest in buying some or all of US Steel, but was outbid by Nippon Steel. The company’s chief executive officer has said the company might still be interested. Pennsylvania’s two senators, Bob Casey, who’s running for re-election, and John Fetterman, also oppose the deal.
Pennsylvania, home to both US Steel and the union, is a key battleground state and the issue has become entwined in the US presidential election. But neither Harris nor Trump raised the deal in their debate Tuesday, held in Pennsylvania.
Biden and Harris have both said US Steel should remain American owned and operated — “guaranteed,” Biden once said. Trump, the Republican presidential nominee, has vowed to kill the sale, and his running mate, Senator JD Vance of Ohio, is a longtime opponent of the deal.
Yoshimasa Hayashi, Japan’s top government spokesman and a candidate for the ruling party’s leadership, said in an interview with Bloomberg last week, after reports that Biden was poised to block the deal, that he’s holding out hope the sale can proceed. “It’s still going on and we don’t know the result yet,” Hayashi said.
In Allegheny County, which includes Pittsburgh and several US Steel facilities, county council member Sam DeMarco is in favor of the deal. As many as 7,500 jobs directly and indirectly rely on the operations of US Steel in the Pittsburgh area, DeMarco said.
“So many of the folks that are in the rank and file, what they’re concerned with is that they have a job in the future and the ability to put food on the family’s table and a roof over the family’s head,” DeMarco said.
At the Irvin plant, Justin Calderone, a shift manager and a former USW member, supports the deal.
“I have not had many run-ins with people who are just like ‘we can’t be sold this and that,’” Calderone said. “I would say 90% of the people here believe that the Nippon purchase is what’s best for our facility.”
Pennsylvania State Senate President Pro Tempore Kim Ward, a Republican, supports the sale.
“My message to either party is take a look at the concessions that have been given. Take a look at the promised investment,” she said in an interview, referring to Biden’s decision. “It would a devastating thing if Biden kills this then, four to five years after, US Steel says ‘we’re leaving.’”
