Following lawsuits filed by U.S. Steel and Nippon Steel earlier this week, the United Steelworkers president released a statement Friday, doubling down on the union’s reasoning for its opposition of the Japanese company’s potential purchase.
“In a ridiculous final attempt to get the government, the general public and the union to support this shortsighted and dangerous merger, U.S. Steel and Nippon have filed baseless lawsuits,” USW President David McCall said in a video statement. “This is more of the same kind of bullying that we’ve seen from U.S. Steel for years and what we had to look forward to had Nippon been the successful bidder.”
On Jan. 3, President Joe Biden blocked Nippon Steel from buying U.S. Steel for nearly $15 billion. If approved, the deal would have brought more than $1 billion to the company’s Gary Works facility.
U.S. Steel and Nippon Steel on Jan. 3 condemned Biden’s decision in a joint statement, calling it unlawful and saying the process was manipulated and the future of steelworkers was sacrificed for the president’s political agenda.
The president blocked the deal on national security concerns, and McCall said both Biden and President-elect Donald Trump understand that it’s imperative for the U.S. to have a robust domestic steel industry into the future.
McCall also mentioned problems with U.S. Steel’s business model — which Nippon intended to follow — specifically idling or closing operations in Gary, Great Lakes, Granite City and UPI.
He claims U.S. Steel canceled investments in Mon Valley and instead invested in a non-union facility, Big River Steel in Arkansas.
“At the same time, Nippon and U.S. Steel were dumping tens of millions of dollars into lobbying and public relations campaigns, trying to convince us, our elected leaders and the public at large that they had a vision for a future,” McCall said. “The public relations campaign caused some public officials to focus on the short-term gain of community benefit promises, but if they had investigated the facts, they would have realized kissing (the) ring in the long-term is an effort in futility.”
The steel companies filed multiple lawsuits last week, which they had promised to do in a Jan. 3 statement. The first — in the U.S. Court of Appeals for the District of Columbia Circuit — alleged the blocking violated due process and statutory procedural requirements and unlawful evidence, and asked the court to set aside the Committee on Foreign Investment in the United States’ review process and Biden’s blocking order.
The second was filed in the U.S. District Court for the Western District of Pennsylvania against Cleveland-Cliffs, CEO Lourenco Goncalves and McCall for “illegal and coordinated actions” to prevent the deal.
“Today’s legal actions demonstrate Nippon Steel’s and U.S. Steel’s continued commitment to completing the transaction — despite political interference with the CFIUS process and the racketeering and monopolistic conspiracies of Cleveland-Cliffs and (McCall)…” said a Jan. 6 statement from the companies. “We remain confident that the transaction is the best path forward to secure the future of U.S. Steel — and we will continue to vigorously defend our rights to achieve this objective.”
On Jan. 3, McCall said he wasn’t worried the decision would change if U.S. Steel took court action.
In December, Gary Mayor Eddie Melton and two Pennsylvania mayors — Cletus Lee from North Braddock and Chris Kelly from West Mifflin — were critical of USW leadership’s position on the deal. Melton has been supportive of the deal since about August.
Nippon Steel Vice Chairman Takahiro Mori said the company planned to invest $1 billion into Gary Works and nearly $3 billion into its union-represented facilities.
In August, the company announced it would put about $300 million toward the facility, specifically the blast furnace, which Northwest Indiana environmental activists were concerned about. The furnace would have had its life extended by up to 20 years.
Blast furnaces are outdated, activists have said, and direct reduction would be more environmentally and economically friendly because it could cut carbon dioxide emissions in half.
“We have always believed that no matter who owns Gary Works, steelworking there should be modernized with the new technology that can continue to operate the mill in a cleaner, greener way that preserves jobs and creates a safer environment for workers and residents alike in Gary,” said a Jan. 3 statement from Gary Advocates for Responsible Development.
After Biden blocked the deal, Melton said he was deeply disappointed, adding that he thinks the transaction was best for families and the stakes are high for Gary.
“The potential sale of U.S. Steel to Nippon Steel presented a significant opportunity for Gary and the American steel industry to grow and prosper,” Melton said. “Now, we face an uncertain future, with Gary Works potentially losing investment and jobs.”
McCall is confident that U.S. Steel will be fine even though the purchase fell through.
“USW members have made the highest quality steel in the world for generations,” he said. “Looking forward, we’ll continue to fight to ensure that tradition continues well into the future.”
