Gary Mayor Eddie Melton issued a joint statement with two Pennsylvania mayors regarding the United Steelworkers’ position on the proposed acquisition of U.S. Steel.
“USW leadership is putting jobs at risk with its actions, plain and simple,” said the joint statement from Melton, North Braddock Mayor Cletus Lee and West Mifflin Mayor Chris Kelly. “During the course of our discussions with Nippon Steel, we urged the company to come to the table with an agreement that addressed each of the concerns that USW leadership raised with us. Nippon Steel delivered, but USW leaders refused to engage in good faith.”
USW International President David McCall and Mike Millsap, director of District 7 and chairman of the negotiating committee, on Thursday released a statement saying the union must continue to resist Nippon Steel’s purchase of the American steel company.
On Dec. 10, Bloomberg reported that U.S. President Joe Biden plans to block Nippon Steel’s $14.9 billion acquisition of U.S. Steel. The Committee on Foreign Investment in the United States panel is expected to refer its decision to Biden on Sunday.
An August letter from the Treasury Department on behalf of CFIUS offered justification for blocking the deal by arguing the deal is a threat to an industry critical not just for the production of military equipment, but also for infrastructure, Bloomberg reported on Dec. 10.
USW leadership met with the Pennsylvania mayors on Monday to discuss lingering concerns. On Wednesday, they met with Melton and Nippon Steel representatives, the statement said.
Nippon leaders made it clear it has no intention of addressing problems the union has with the sale, the union’s statement said.
In the meetings, Nippon conceded that its pledged $1 billion for a hot strip mill in Pennsylvania’s Mon Valley is only half the cost required, the statement said, which leads union leaders to question the company’s commitment to the long-term success of facilities.
Union leaders also said they’re concerned that Nippon will transfer production from other facilities to Big River in Arkansas, which they argue hurts union workers and undercuts long-term job security.
“It became obvious over the course of the meeting that Nippon intends to spend some money in the communities surrounding our facilities if the sale happens, such as funding the construction of community centers,” USW’s statement said. “But it would not commit to keeping production in our current facilities. And without our facilities and the good, family-supporting jobs they sustain, our communities will ultimately suffer.”
In December 2023, it was announced that Nippon aimed to acquire the American company, according to U.S. Steel’s website. U.S. Steel employs about 4,500 steelworkers at both Gary Works and its Midwest plant in Portage.
U.S. Steel has repeatedly said that the transaction should be approved.
“The benefits are overwhelmingly clear,” a U.S. Steel statement said. “Our communities, customers, investors and employees strongly support this transaction, and we will continue to advocate for them and adherence to the rule of law.”
Nippon announced in August that if the deal is approved, it would invest about $300 million into the local Gary Works facility, specifically the blast furnace. With the investment, the Gary Works’ furnace would have its life extended by up to 20 years.
Since the announcement, Melton has continually expressed his support for the deal.
“When I first heard about this deal, like many, I say this respectfully, I was skeptical as well,” Melton said Dec. 12. “I wasn’t sure what fate was going to look like for the city of Gary. … But for the city, this partnership would mean so much.”
Northwest Indiana environmental groups have said they oppose the steel deal because they worry the deal will further permit the use of blast furnaces, calling the technology outdated. Just Transition Northwest Indiana and Gary Advocates for Responsible Development both prefer direct reduction furnaces for steelmaking.
During a Dec. 12 Gary press conference, Nippon Steel’s Representative Director and Vice Chairman Takahiro Mori said the company plans to invest $1 billion into Gary Works.
If the deal is approved, Nippon plans to invest nearly $3 billion into its union-represented facilities. The Japanese company is committed to serving steelworkers in the region, Mori said Dec. 12.
In a statement after USW meetings, Nippon executives thanked the Pennsylvania mayors and Melton for their support of the deal. Nippon’s statement said McCall refuses to engage with the Japanese company.
“This is now the second time in a matter of weeks that President McCall walked away from discussions — putting at risk the necessary capital and technological improvements that Nippon Steel will bring to U.S. Steel so it can produce stronger, cleaner and more advanced steel for its customers in the U.S.,” the statement said. “We were particularly disappointed that the USW put out its recent statement denouncing the meeting while it was still taking place, and while President McCall was still in the room.”
Nippon plans to continue pursuing USW’s approval and agreement, the statement said.
Lee, Kelly and Melton said in their statement that USW’s statement was “a slap in the face.”
“We have been through a lot of struggle in our communities, but the USW’s behavior is a new low,” the statement said. “We know that the members would be disappointed if they were in the room to hear what we heard.”
