USW Gives Cliffs Its Right To Bid on U.S. Steel

Recall that U.S. Steel recently announced it is considering multiple unsolicited offers to buy all or a portion of the Pittsburgh-based steelmaker. An initial bid from Cliffs was rejected.

The union has now transferred to Cliffs its right to bid on the sale of U.S. Steel. The right is part of the union’s Basic Labor Agreement with U.S. Steel, which includes certain successorship rights in addition to the right to bid.

USW international president Thomas Conway officially transferred the right to Cliffs in a letter sent to Cliffs’ chairman, president, and CEO Lourenco Goncalves.

“By this letter, the Union transfers and assigns to Cleveland-Cliffs the Union’s Right to Bid. The Union’s transfer and assignment only applies to Cleveland-Cliffs,” Conway’s letter states.

“With this exclusive assignment, Cliffs is the only realistic buyer able to acquire the totality of U.S. Steel,” Cliffs says in a statement.

“In practice, an M&A transaction could not be consummated without the support of the USW,” says an additional statement from Cliffs sent to SMU.

Cleveland-Cliffs has agreed that upon closing of its potential purchase of U.S. Steel, it will assume all labor agreements currently in place between U.S. Steel and the USW.

Cliffs has an amicable relationship with the USW and already operates integrated steel mills. Considering this, it’s no surprise the union is backing Cliffs as the buyer, as doing so ensures job security for its members at U.S. Steel mills.

In labor negotiations last year, talks between the union and Cliffs were friendlier than those with U.S. Steel. Cliffs reached an agreement with the union in August, while a deal was not reached with U.S. Steel until November, well past the Aug. 31 expiration date of the previous contracts.