By ELIZABETH DONALD
Nippon Steel has promised not to move production overseas as plans move forward for the Japanese company’s acquisition of U.S. Steel.
The acquisition will include the Granite City steel mill currently idled with hundreds of workers laid off.
In an op-ed piece in the Wall Street Journal, Nippon President Eiji Hashimoto and Executive Vice President Takahiro Mori declared it intended to bring new technology to U.S. Steel with “fresh investment and innovation” as well as increasing efficiency and carbon emissions.
But the things that won’t change, it states, include the U.S. Steel name and branding, the Pittsburgh headquarters and the collective bargaining agreements in place with the unions.
NO ANTICIPATED JOB LOSSES
“We don’t anticipate any job losses as a result of the transaction, and we won’t shift existing production or American jobs overseas,” they wrote. “The job security of U.S. Steel’s unionized workforce will be greater following this transaction, as U.S. Steel will have the added financial strength of a larger organization with more capital.”
The op-ed made national news, as some of the details of Nippon’s offer became public. Nippon’s offer was $14.1 billion, valuing U.S. Steel’s shares at 142 percent of their value. Reuters reported that U.S. Steel received a similar offer from U.S.-based Cleveland-Cliffs, the company favored by United Steelworkers.
While the last publicly declared offer from Cleveland Cliffs was $35 per share compared to Nippon Steel’s $55 per share, the filings released last week showed that Cleveland Cliffs raised their offer to $54 per share with another $6.50 potentially added.
STILL IN ‘LIMBO LAND’
However, Reuters states the board of U.S. Steel was concerned that accepting Cleveland Cliffs would not pass review by antitrust regulators because 95 percent of U.S. iron ore production would be under the control of the new company. They were also concerned that half of Cleveland Cliffs’ offer was based on stock value and would require a vote from its shareholders. Nippon sweetened its offer at the last minute, according to the filings.
Mori has been meeting with members of the U.S. Congress and a delegation from Nippon has been in Washington, according to Nikkei Asia, while local representatives, including U.S. Rep. Nikki Budzinski who represents the area, have expressed concerns about the deal. Bloomberg reports that a national security review of the Nippon deal is likely to extend into 2025.
Dan Simmons, president of United Steelworkers Local 1899, which represents workers at the Granite City plant, described their current state as “limbo land” to the Alton Telegraph.
“We’re still in limbo land; we don’t really know a lot yet,” Simmons told the Telegraph. “We don’t know whether Nippon is a final deal.”