HARRISBURG — Nippon Steel Corp. raised its capital commitment Thursday by more than $1 billion to spend on U.S. Steel’s plants amid entrenched political and labor opposition to the Japanese company’s nearly $15 billion acquisition of the iconic American steelmaker.
Nippon Steel’s $1.3 billion commitment to upgrade facilities in Pennsylvania and Indiana is on top of an earlier commitment to spend $1.4 billion.
The announcement was lauded by David Burritt, U.S. Steel’s president and CEO, as evidence of Nippon Steel’s desire to “complete the transaction and expand U.S. Steel.” The United Steelworkers dismissed it as “lip service.”
The sale comes during a tide of renewed political support for rebuilding America’s manufacturing sector, a presidential campaign in which Pennsylvania is a prime battleground, and a long stretch of protectionist U.S. tariffs that analysts say has helped reinvigorate domestic steel.
In its statement, Nippon Steel said it will spend at least $1 billion to upgrade the hot strip mill at the Pittsburgh-area Irvin Plant, along with other facilities in Pennsylvania’s Mon Valley Works, and about $300 million to improve one of the blast furnaces at Gary Works in Gary, Indiana.
The commitments “far exceed” what Pittsburgh-based U.S. Steel would pledge on its own and will help make the company and the American industry stronger and more competitive, Burritt said.
“The bottom line is these are investments in the future of integrated American steelmaking and the employees, families and communities that rely on it,” Burritt said in a statement.
Such improvements will extend the life of the facilities and boost productivity, Nippon Steel said. It reiterated that it expects the transaction to close in the second half of 2024, despite ongoing political and labor opposition.
The United Steelworkers is against the deal after it backed a bid by U.S.-based Cleveland Cliffs. The union filed a grievance, which was completed Aug. 15, and the case is now in the hands of the three members of the arbitration board, the union said.
The Steelworkers say they are intent on “keeping U.S. Steel U.S. owned” and are protesting what they view as the transaction’s failure to incorporate its contractual agreements on labor, pensions and other matters after they weren’t consulted on the details.
The union’s leaders dismissed Nippon’s commitment, saying that U.S. Steel has already broken a string of promises that include shutting down plants and canceling capital investments, such as one targeted for Mon Valley plants.
“Nippon is still trying to hide behind its North American shell company to shield itself from its contractual obligations to retirees and our communities, and it still needs to answer to pressing concerns regarding our critical supply chains and national security,” the union’s international president, David McCall, and negotiating committee chair Mike Millsap said in a statement. “This is just more of what we’ve seen all along: lots of words, no real change.”
With the United Steelworkers against the deal, the sale has drawn opposition from senior political figures on both sides of the aisle.
Last week, former President Donald Trump, the Republican presidential nominee, reiterated his pledge to block the deal during a campaign appearance in York, Pennsylvania.
Vice President Kamala Harris, the Democratic nominee, who is endorsed by the Steelworkers union, has not spoken about the deal since President Joe Biden ended his candidacy in July.
However, Biden, who had made his support for organized labor explicit, had all but vowed to block U.S. Steel’s sale and said in an April rally with steelworkers in Pittsburgh that the company “should remain totally American.”
Senior U.S. senators have opposed the deal on both economic and national security grounds, including Democratic Sens. Bob Casey and John Fetterman, of Pennsylvania, and Sherrod Brown, of Ohio; and Republican Sens. Ted Cruz, of Texas, Josh Hawley, of Missouri, and JD Vance, of Ohio, now Trump’s vice presidential nominee.
The Department of Justice is reviewing it for antitrust compliance, and Biden’s White House has indicated the secretive Committee on Foreign Investment in the United States will review the transaction for national security concerns.
The committee can recommend that the president block a transaction, and federal law gives the president that power.
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Publish date : 2024-08-29 08:09:00
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