U.S. Steel, Nippon, Mon Valley mayors urge Biden to approve $14.9B deal
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The Committee on Foreign Investment in the United States told the White House on Monday it is deadlocked on the proposed $14.9 billion sale of U.S. Steel to Japan’s Nippon Steel Co., teeing up President Joe Biden to block the deal.
The decision, or lack thereof, was first reported by the Washington Post, which cited two sources given anonymity to disclose confidential information. The New York Times also reported the action, citing letters the committee sent to the White House, U.S. Steel and Nippon.
Both companies later released statements confirming the panel’s indecision and urging Biden to approve the deal. Biden, who has vowed to block the sale, has 15 days to make a decision.
Nippon has worked to address U.S. security concerns and is committed to protecting American jobs, the company said.
“We are confident that our transaction should and will be approved if it is fairly evaluated on its merits,” the statement concluded.
In its statement, U.S. Steel noted Japan is one of the closest American allies, and the deal would strengthen each country’s steel industry against Chinese competition.
Nippon has committed to $2.7 billion in plant upgrades and shown willingness to make these pledges legally binding, U.S. Steel added.
A dozen mayors in and around the Mon Valley sent out a letter supporting the sale, which also has support of some local union leaders.
But United Steelworkers President David McCall released a statement that called the proposed transaction a representation of corporate greed that sells out American workers.
“Nippon has spent decades dumping its products into our markets, injuring U.S. producers and undercutting our members’ jobs,” McCall said. “Its long-term plans to reduce blast furnace capacity by transferring production to U.S. Steel’s non-union facility in Arkansas would further compromise our ability to meet our national security and critical infrastructure needs.”
The union called for Biden to block the deal, even as rank-and-file workers appears to be increasingly in favor of it — a contrast noted in the mayors’ letter.
“Each of us believes deeply in the importance of union labor, but USW leadership is currently playing games at a time when they should be listening to and acting on behalf of their members,” the letter said.
The Committee on Foreign Investment in the United States is chaired by Treasury Secretary Janet Yellen and weighs the security implications of international investments into U.S. businesses. In its assessment, the committee noted the takeover could reduce domestic steel output, posing a national security risk, the Washington Post reported.
Nippon offered remedies, including appointing American citizens to top posts at U.S. Steel, but not all committee members were convinced.
Both companies plan to pursue legal action against the committee’s decision, Bloomberg has reported.
Like Biden, President-elect Donald Trump also has vowed to block the deal if the decision came to him — though it almost certainly won’t based on the timeline. He wants U.S. Steel to remain American-owned, and said he believes tariffs and his policies can help the iconic domestic manufacturer grow from within.
The sale of the Pittsburgh-based steelmaker was announced last December. It received immediate pushback from leadership at United Steelworkers, the union representing workers at U.S. Steel’s three plants in Western Pennsylvania and other facilities.
Nippon has pledged to keep steel production in the Pittsburgh area’s Mon Valley, invest more than $1 billion in the region’s steel-making sites and maintain U.S. Steel’s corporate headquarters in Pittsburgh.
The Japanese company’s efforts seem to have paid dividends in the Mon Valley. Hundreds of steelworkers rallied Thursday outside of the U.S. Steel facility in Clairton to support the sale, accompanied by several politicians and industry advocates.
Steelworkers union leaders in the Mon Valley have split from McCall and said a majority of the roughly 3,000 rank-and-file members there are in favor of the deal. Some of these workers have portrayed the sentiment within plants as more of a 50-50 split.
McCall told TribLive last month he remains firmly against any deal. He said he has little faith Nippon will make good on pledges to pour investment into the Mon Valley Works, which some analysts say needs, at the least, the money promised by the Japanese steelmaker to remain competitive.
As reports continue to highlight Biden’s opposition, Nippon Steel announced Dec. 17 all U.S. Steel employees below senior-management level would receive a $5,000 bonus as a reward for the closing of the sale.
Steelworkers leadership in a letter called bonuses a “final, desperate attempt” to win rank-and-file support and a distraction from the “threat this transaction poses to our jobs, our industry and our national security.”
In a statement, Nippon Vice Chairman Takahiro Mori defended the offer as an acknowledgment of workers’ “contributions to the value generated for stockholders.”