Steelworkers Want Nippon to Invest in US Steel. Why Don’t Politicians?

A group of unionized steelworkers in Pennsylvania are urging politicians to allow Japanese steel company Nippon Steel to move forward with its planned investment in U.S. Steel, but the Biden-Harris administration continues to obstruct the deal.

Members of United Steelworkers (USW) Local 1557, which recently endorsed Donald Trump for President over Kamala Harris, appeared on Fox Business last week to discuss their endorsement. During the interview, the steelworkers also expressed support for Nippon Steel Corporation’s (NSC) proposed acquisition of U.S. Steel.

“At this point now, there’s a change. That change is that we need investment,” said Local 1557 member Andy Macey. “We’ve had some offers that are lesser offers for our plant to modernize, but Nippon wants to come in and invest––from what we understand today––it was increased to $2.7 billion. That’s a lot. We need a new hot mill in our urban plant. That hot mill is from 1938. It cannot compete with other steel mills that are even smaller, that have the technology that’s up to date. We need to have that technology.”

In December 2023, Nippon offered to purchase U.S. Steel for $14.9 billion, or $55 per share, a 40 percent premium over the stock price at the time. Additionally, Nippon pledged $1.4 billion in capital investments to modernize technology at U.S. Steel’s mills, which lag far behind other countries like China. In August, Nippon increased this pledge to a $2.7 billion capital investment. U.S. Steel’s CEO has warned that closures of steel mills may be inevitable if the Nippon deal falls through, putting the livelihoods of steelworkers at grave risk.

In addition to the investment considerations, Nippon Steel also made guarantees that “[a]ll of U.S. Steel’s commitments with its employees, including all collective bargaining agreements in place with its unions, will be honored and NSC is committed to maintaining these relationships uninterrupted.” Macey noted the importance of these promises in his Fox Business interview.

“They’re buying our whole company, so they’re not going to piece us out. They’re very adamant about making us a better player in the global market with quality steel that can be made here in the Mon Valley, like it has been for the last 125 years plus,” said Macey.

Despite these guarantees, USW’s national leadership came out against the planned acquisition, issuing a statement “slamming” the deal and “strongly [urging] government regulators to carefully scrutinize this acquisition.” This statement clearly caught the ear of President Biden and Vice President Harris, whose campaigns are heavily reliant on union cash. Big Labor spent at least $1.8 billion to elect Democrats in 2020 alone.

Three days after USW’s initial statement, National Economic Advisor Lael Brainard released a statement of her own, arguing that the deal deserves “serious scrutiny” and praising USW as “an example of why union leadership is critical.” In March, President Biden issued an official White House statement noting his own opposition to the deal. More recently, the White House has seemingly decided to punt the final decision on an ongoing Committee on Foreign Investment in the United States (CFIUS) investigation until after the election, saving Kamala Harris from the fallout of steel jobs disappearing due to the Biden-Harris administration cancelling the Nippon deal before Election Day.

While steelworkers themselves are supportive of Nippon’s investment proposal and want to see their jobs remain, President Biden and Vice President Harris are playing politics and taking their marching orders from union bosses instead. USW’s leadership and the Biden-Harris administration should listen to rank-and-file USW members and allow the Nippon deal to go through.

Jason Zugai of USW Local 2227 in West Mifflin, Pennsylvania, explained it most succinctly: “We’re not on the same page as the leaders. They’d still have jobs if the plant gets shut down.”