On Sept. 4, US Steel warned that should its merger with Nippon Steel fail, it would jeopardize thousands of union jobs, likely result in plant closures, and US Steel would relocate its headquarters out of Pennsylvania.
The stark warning came amidst growing bipartisan opposition to the deal and following comments by Democratic Vice President Kamala Harris on Monday, Sept. 2, when she said that she wanted US Steel to remain “American owned and operated.”
Republican nominee Donald Trump has also said that if elected he would block the deal.
The issue is of political significance as Pennsylvania is a crucial battleground state in the 2024 presidential election, and the prospect of thousands of lost, blue-collar union jobs could sink either candidate’s ability to win the state.
In a statement, US Steel CEO David Burrit said, “We want elected leaders and other key decision makers to recognize the benefits of the deal as well as the unavoidable consequences if the deal fails.”
Success
You are now signed up for our newsletter
Success
Check your email to complete sign up
Burrit insists that in order for US Steel to survive, it needs the $3 billion investment from Nippon as part of a deal that is said to be worth nearly $15 billion.
Without the deal, Burrit says that US Steel “will largely pivot away from its blast furnace facilities, putting thousands of good-paying union jobs at risk [and] negatively impacting numerous communities across the locations where its facilities exist.”
Following his comments, US Steel shares rose a modest one percent on Wednesday (Sept. 4).
RELATED:
Nippon’s pledge
Nippon Steel North America — a Japanese company which has operated in the United States for over 50 years — pledged that should the deal go through that appointees to the company’s board of directors would include a majority of American citizens.
Burrit says opposition to the deal is both “puzzling” and “confusing.”
Should the deal go through mills in Gary, Ind., and its Valley Works plant outside Pittsburgh, would see new cash injections, something US Steel has had to cut back on over the past decade to save money, he said.
At an employee rally on Wednesday, US Steel plans to tout the deal in an attempt to swing public, and employee opinion.
In a statement, Burrit said, “Today’s rally is about displaying support for the transaction with Nippon Steel. We want elected leaders and other key decision makers to recognize the benefits of the deal as well as the unavoidable consequences if the deal fails.”
For months, US Steel has been lobbying key state leaders in an attempt to gain more support for the deal, including Gov. Josh Shapiro, and Senators Bob Casey and John Fetterman.
READ MORE:
- RFK Jr. Suspends Presidential Campaign and Endorses Trump
- Japan Protests First-time Breach of Its Airspace by Chinese Military Plane
By the numbers
According to a 2023 US Steel impact study, US Steel sustains 11,417 jobs, generates $138.2 million in state and local taxes and has an overall economic impact of $3.6 billion.
The study says that this direct impact includes “a direct impact of $1.9 billion and an indirect/induced impact of $1.7 billion.”
“The value added impact generated by U.S. Steel’s operations in Pennsylvania on the economy was $1.9 billion ($1 billion direct and $907.5 million indirect/induced) in FY22.”
The study estimates that US Steel contributes 3,703 direct jobs and 7,714 “direct/induced” jobs in Pennsylvania.
In addition, Nippon Steel announced in late August that it would be investing more than $2.7 billion into the Gary and Mon Valley plants, almost doubling the company’s initial investment offer.
Nippon has also promised no layoffs of hourly employees through 2026.
