U.S. Steel merger postponed to December as USW accuses Nippon of ‘empty promises’

By ELIZABETH DONALD
Illinois Correspondent

Granite City, IL – United Steelworkers (USW) fired more shots at Nippon Steel after U.S. Steel (USS) stockholders approved the controversial sale, even as the merger is delayed.

USW sent a message to its members on May 3 warning them that U.S. Steel management would be inviting – or ordering – them to its “Nippon propaganda meetings.”

USW states that the steel company and Nippon continue to maintain the merger will be a good thing, but that it’s important to remember who benefits. Stockholders get $55 a share, which is a significant premium over current prices, and CEO David Burritt will receive a $72 million departure bonus.

FALSE PROMISES
“If USS is truly committed to ‘future focus,’ it should focus on what’s good for workers, retirees and future retirees and abandon its merger,” wrote USW President David McCall with Mike Millsap, chairman of the negotiating committee.

McCall alleges that Nippon’s promise to honor USW agreements is false, because Nippon itself does not sign the agreements. He said USS remains the contract party and Nippon only pays if USS defaults. “This is no guarantee; it is a roadmap for years of litigation, gameplaying and evasion written by corporate lawyers whose assignment is to protect Nippon at all costs,” McCall wrote.

McCall said Nippon’s vow for significant investment and job security is an empty promise. The contracts actually say Nippon will not lay off workers unless part of a planned layoff or idling prior to closing, or an act of God, or downturn in business conditions. “With all these exceptions, the promise is nothing but hollow,” McCall said.

GRANITE CITY
The “idling” clause would directly affect the Granite City steel mill, which was indefinitely idled last year and put many steelworkers out of work. U.S. Rep. Nikki Budzinski has said she will hold the line on Nippon’s plan for Granite City, and if there isn’t a plan, she will not support its purchase of U.S. Steel.

McCall also pointed out that Nippon leaders recently testified before the International Trade Commission to eliminate tariffs on Japanese tin products.

“Actions speak louder than words, and Nippon showed that, when push comes to shove, it will always favor its operations in Japan over U.S. steelmaking,” he said.

The USS/Nippon “dog and pony shows,” as McCall called them, are a distraction from real facts, he said.

“The more we’ve heard from Nippon since December, the less real their commitments have become,” he said. “U.S. Steel must remain domestically owned for our national security, our economic security, and the well-being of the communities where our members live and work.”

CLOSING DATE POSTPONED
Meanwhile, the closing date for the $15 billion acquisition has been pushed back after the U.S. Department of Justice requested additional information in its review of the merger under antitrust law, according to Reuters. That puts the acquisition in December after the Presidential election, even though both President Joe Biden and GOP presidential candidate Donald Trump have said they oppose the takeover, according to Kyodo News.

“Nippon Steel will continue to fully cooperate with the examination of the relevant authorities,” the Tokyo-based company said in a statement, according to the Associated Press.

The acquisition is currently under review by the Committee on Foreign Investment in the U.S. while USS Steel leaders have maintained that the transaction represents the best path forward for all stakeholders, according to The Hill.