Senators, Steelworkers raise concerns over purchase of U.S. Steel

By ELIZABETH DONALD
Illinois Correspondent

Senators and United Steelworkers (USW) leaders together raised concerns over proposed purchase of U.S. Steel as the deal rolls forward.

U.S. senators Sherrod Brown (D-Ohio), Bob Casey Jr. (D-Penn.) and John Fetterman (D-Penn.) wrote a joint letter to U.S. Treasury Secretary Janet Yellen on June 27 warning that Nippon Steel’s record of dumping steel products in the U.S. presents a clear conflict with defending the U.S. steel industry, according to USW.

“Nippon’s acquisition of U.S. Steel poses a grave threat to the international trade system that seeks to protect American manufacturers and workers from those who would unfairly dump steel into the American market,” the senators wrote. “Given the clear and present threats that a Nippon Steel acquisition poses to American workers and a critical industry, we believe executive action to block this deal is urgent.”

Both President Joe Biden and former president Donald Trump have gone on record opposing the Nippon deal. Following his declaration, USW formally endorsed Biden in the 2024 presidential race.

CHALLENGING THE DEAL
USW leaders met with local union leaders from U.S. Steel mills and mines last week to update them about the progress of recent months.

Since the Nippon deal was announced in December 2023, USW has filed grievances challenging the deal by alleging that U.S. Steel violated the successorship provisions bargained more than 20 years ago that require any potential buyer to assume the contract and all associated collective bargaining agreements.

The Steelworkers allege that Nippon is trying to avoid responsibility for the contracts by setting up “Nippon Steel North America” as a shell company to shield it from its obligations to workers and retirees.

“Of course, this is not the story that U.S. Steel and Nippon are telling to company employees in plant meetings and to the public in their costly and misleading media campaign,” read a statement issued June 27 by USW President David McCall and negotiating committee chair Mike Millsap.

Nippon has promised to invest $1.4 billion in U.S. Steel facilities over the next three years, but USW states that Nippon has no specific plans in mind and their promise is just a “good faith” analysis of new capital expenditures. Any improvements would happen only if “economically and technically feasible,” USW states.

The same applies to the promise of no layoffs, plant idlings and shutdowns, according to USW – and also does not bring the Granite City plant back on line, as none of the promises apply to decisions U.S. Steel has already made.

‘ALL CONDITIONAL’
The Washington Post obtained a copy of the draft agreement Nippon sent to USW earlier this spring. It includes language allowing Nippon to abandon its promise not to conduct layoffs or plant closures in the case of “unanticipated or significant downturn in business conditions.”

McCall told the Post that Nippon’s agreement is all conditional, an “absolute empty promise.”

“All of these so-called commitments were conditioned upon the USW withdrawing the successorship grievances, renouncing our opposition to the deal, and joining Nippon in actively supporting the transaction,” McCall wrote. “Our concerns about the many violations of our labor agreements go hand in hand with our significant concerns regarding the negative impact of the transaction on U.S. critical infrastructure supply chains and our national security.”

CLEVELAND CLIFFS
Meanwhile, Cleveland-Cliffs CEO Lourenco Goncalves hosted Sen. Brown and USW steelworkers on June 26 to reiterate that his company is still interested in purchasing U.S. Steel. Cleveland-Cliffs had made an unsolicited offer that was about half the value of Nippon’s offer, and was rejected in part due to antitrust and monopoly concerns, according to U.S. Steel leaders.

Goncalves said his position has not changed, and he is now waiting on Biden and Trump to follow through on their opposition to the Nippon deal.

Goncalves and McCall appeared together at the press conference, underscoring their close partnership. Noting that he had been in the industry for 44 years, Goncalves called McCall the most reliable and trustworthy partner he’s had, according to Steel Market Update. “It’s the beginning of a wave of change” when Labor, companies and investors make money together, he said.

For its part, Nippon leaders continue to tell shareholders that they believe the deal will go through much more smoothly after the election, when they said the union would have much less influence, according to Nikkei Asia.