Northwest Indiana leaders were cautiously optimistic about the future of U.S. Steel’s Gary Works plant after President Donald Trump signaled Friday afternoon that he’ll approve an investment by Japan-based Nippon Steel in the iconic American steelmaker.
In his statement Friday, Trump said that “after much consideration and negotiation, US Steel will REMAIN in America, and keep its Headquarters in the Great City of Pittsburgh.” He referred a “planned partnership” will add $14 billion to the U.S. economy, although it wasn’t clear what the terms of the deal would be or who would control U.S. Steel under the arrangement. Neither company explained Friday how the partnership would be structured.
Nippon Steel’s nearly $15 billion bid to buy U.S. Steel was blocked by former President Joe Biden on his way out of office and, after Trump became president, subject to another national security review by the Committee on Foreign Investment in the United States. The results from the second CFIUS review haven’t been released.
Gary Mayor Eddie Melton, who has been supportive of the bid and hosted Nippon officials in Gary in December, said he’s pleased by the news.
“This has been a long time coming,” Melton said in a statement. “As mayor, I facilitated conversations with Nippon Steel and talks with mayors in steel making cities and towns from around the country. I spent months conducting due diligence and listening to the concerns of steelworkers, union leadership and members of the Congressional Black Caucus around the country. I stuck to my guns even when others opposed this deal because I knew it was good for our citizens.
Melton thanked U.S. Sen. Todd Young, R-Indiana, for ensuring clear communication with the President on the value and impact of this deal for Gary.
Young called the announcement “a huge win for Hoosier workers and the American economy. I commend the President, Treasury Secretary Scott Bessent, and administration officials for carefully considering all aspects of this situation and conducting an impartial review, as I previously called for. This is a big day for American manufacturing,” in an emailed statement.
Melton said Nippon has committed not only to maintain the current level of union jobs, but has also agreed to an increase in the number of well-paid steelmaking jobs in America.
“For communities like Gary who have suffered from decades of disinvestment, this is a historic moment. As we learn more details, we will continue to update the public and work with all stakeholders to ensure the best outcomes for our residents and steelmaking families.”
Trump’s statement was vague as to whether he is approving Nippon Steel’s bid after he vowed repeatedly to block the deal to prevent U.S. Steel from being foreign-owned.
More recently, Trump suggested that Nippon Steel would invest in U.S. Steel, not buy it, and one union official suggested Friday that the federal government will have a role in the company’s management going forward. But investors seemed to take Trump’s statement as a sign that he’s approving some sort of merger, sharply pushing up U.S. Steel’s shares.
Shares of U.S. Steel jumped 21% on the news, and continued rising in aftermarket trading.
Nippon Steel said the partnership is a “game changer — for U.S. Steel and all of its stakeholders, including the American steel industry, and the broader American manufacturing base.” U.S. Steel said it “will remain American, and we will grow bigger and stronger through a partnership with Nippon Steel that brings massive investment, new technologies and thousands of jobs over the next four years.”
U.S. Rep. Frank Mrvan, D-Highland, has been skeptical of a merger due to concerns about national security and Nippon’s commitment to union jobs.
“In the months since, as the Vice Chairman of the Congressional Steel Caucus, I’ve listened closely to the many voices raised across the political spectrum, including from the prior administration and the Trump Administration,” Mrvan said in a statement. “It is clear that this unified front of concern and advocacy played a crucial role in shaping the terms, incentives, and safeguards now in place.
“Thanks to this persistent and bipartisan pressure, we are in a stronger, more secure position today than we were at the time of the initial announcement. But let me be clear: this is not the end of our oversight. Nippon Steel must be held to every promise made — from promises to the hardworking steelworkers of Northwest Indiana and the City of Gary, to the economic and strategic interests of the United States. We will not hesitate to act if those commitments are broken.”
Japan’s chief tariff negotiator Ryosei Akazawa told reporters Friday that he was closely watching the development. He said Nippon Steel has made a proposal that could win support from U.S. Steel and make a good investment for both Japan and the U.S.
Josh Spoores, the Pennsylvania-based head of steel Americas analysis for commodity researcher CRU, said that, from what he’s seeing, “this ‘partnership’ is a green light for the acquisition.”
U. S. Steel’s board and stockholders approved Nippon Steel’s bid last year. It has been opposed by the United Steelworkers union. The union had no immediate comment Friday.
A union official who defied the United Steelworkers’ leadership to support Nippon Steel’s bid said Friday that the federal government could take on a major role in the deal.
“It’s sounds like the deal’s done,’’ said Jason Zugai, vice president of the United Steelworkers union local at U.S. Steel’s Irvin finishing plant near Pittsburgh.
Zugai said he was “relieved, happy and thankful.’’
He hadn’t seen anything on paper but, he said, his understanding was that Nippon “will make all the profit’’ and the federal government will have “a golden chair’’ that allows it to veto any plans to idle or shut down U.S. Steel plants.
Keeping U.S. Steel’s headquarters had always been part of Nippon Steel’s bid to buy it. To sweeten the deal, Nippon Steel had offered up a $2.7 billion commitment to upgrade U.S. Steel’s two blast furnaces and pledged that it wouldn’t import steel slabs that would compete with the facilities.
Nippon Steel also had pledged not to conduct layoffs or plant closings during the term of the existing labor agreement and to protect the best interests of U.S. Steel in trade matters.
U.S. Steel’s CEO David Burritt warned last September that blocking Nippon Steel’s bid would mean U.S. Steel would “largely pivot away” from investing in its two blast furnaces — one just outside Pittsburgh and one in Gary, Indiana — and it would raise “serious questions” about remaining headquartered in Pittsburgh.
As recently as December, Trump said he was “totally against the once great and powerful U.S. Steel being bought by a foreign company.”
Then in February, Trump suggested that Nippon Steel wouldn’t buy U.S. Steel, as it had planned, but that it would instead invest in U.S. Steel.
Last month, Trump ordered a new national security review of Nippon Steel’s proposed bid.
The Associated Press contributed.
