Steelworkers make their opinions heard over potential blocking of US Steel-Nippon deal
American steelworkers speak to Gxstocks Lydia Hu outside of Pittsburgh, Pennsylvania, where the U.S. Steel headquarters may soon be handed over to Japan-based Nippon.
An arbitration board on Wednesday ruled that Nippon Steel's proposed $14.9 billion acquisition of U.S. Steel has complied with the requirements of the firm's labor agreement with the United Steelworkers (USW) union, removing a potential hurdle to the deal ultimately proceeding.
The arbitration board, which was selected by U.S. Steel and the union to settle disputes, found that the company met its obligations under the successorship provisions of its labor contract with the USW, despite the union's objections.
U.S. Steel said that arbitrators determined that Nippon Steel has recognized the USW as the bargaining representative for its employees at the company, made reasonable assurances that it's willing and financially able to honor U.S. Steel's commitments to the USW, and assumed all of U.S. Steel's agreements with USW-represented employees.
The decision eliminates a potential barrier to U.S. Steel's acquisition by Nippon Steel, though the deal is still undergoing a regulatory review by the Committee on Foreign Investment in the U.S. (CFIUS), which is looking into national security concerns related to the transaction.
U.S. Steel has warned it may be forced to close steel plants if the deal with Nippon Steel falls through, given Nippon's pledge to invest in the Mon Valley Works and Gary Works. (Justin Merriman/Bloomberg via Getty Images / Getty Images)
"With the arbitration process now behind us, we look forward to moving ahead with our pending transaction with Nippon Steel," U.S. Steel CEO David Burritt said in a statement. "With the significant investments and contractual commitments from Nippon Steel, we will protect and grow U.S. Steel for the benefit of our employees, communities and customers."
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| X | UNITED STATES STEEL CORP. | 38.22 | +0.42 | +1.11% |
| NPSCY | NIPPON STEEL CORP. | 7.52 | +0.08 | +1.08% |
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The company added, "U.S. Steel and Nippon Steel continue to progress through U.S. regulatory reviews of the pending transaction and work toward closing the transaction by the end of this year."
US STEELWORKERS MAKE PLEA TO SAVE 'EVERYTHING WE'VE WORKED FOR' AMID LOOMING SALE TO FOREIGN COMPANY
The United Steelworkers union continues to oppose U.S. Steel's acquisition by Nippon Steel despite the arbitration board's ruling. (Justin Merriman/Bloomberg via Getty Images / Getty Images)
The USW said in a press release that it received the arbitration board's decision and that "we strenuously disagree with the result."
"The arbitrators accepted at face-value Nippon Steel's statement that it would assume the Basic Labor Agreement, despite the obvious means by which it's using its North American holding company to insulate itself from our contracts," the USW said. "Nippon's commitment to our facilities and jobs remains as uncertain as ever, and executives in Tokyo can still change U.S. Steel's business plans and wipe them away at any moment."
"We're clearly disappointed with the decision, but it does nothing to change our opposition to the deal or our resolve to fight for our jobs and communities that hang in the balance in this transaction," the USW added.
NIPPON STEEL PUSHES BACK ON NATIONAL SECURITY CONCERNS RAISED BY BIDEN ADMIN OVER US STEEL PURCHASE
Nippon Steel says its commitments to the USW have gone beyond what is required under the union's contract with U.S. Steel. (Justin Merriman/Bloomberg via Getty Images / Getty Images)
Nippon Steel told Gxstocks in a statement it was pleased with the arbitration board's findings that it has complied with the Basic Labor Agreement (BLA) between U.S. Steel and the USW.
"We remain focused on forging a productive relationship with the USW, which includes fulfilling our commitments that go far beyond what is currently required in the existing BLA and delivering on our goal to protect and grow U.S. Steel for the benefit of its employees, its customers, the communities in which U.S. Steel operates, and American industry," the company said.
The proposed deal has attracted opposition from President Biden. Vice President Harris and former President Trump have also said they would block the deal. It's unclear when the CFIUS review will conclude and whether efforts by Nippon Steel to assuage national security concerns about its purchase of U.S. Steel to prevent the president from blocking the deal.
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U.S. Steel warned earlier this month that it needs the deal to go through or it may be forced to idle its steel plants in Pittsburgh's Monongahela Valley and Gary, Indiana, which Nippon Steel has pledged to upgrade with a $2.7 billion investment if the transaction proceeds.
U.S. Steel has also warned that it may be forced to relocate its headquarters out of Pittsburgh if those plants are idled.
Gxstocks' Lydia Hu contributed to this report.
