Auto Alliance Opposes a Potential USS-Cliffs Merger

Written by Laura Miller

The Alliance for Automotive Innovation (AAI), the association representing auto manufacturers making most of the vehicles sold in the US, has voiced its opposition to the potential acquisition of U.S. Steel by Cleveland-Cliffs.

In an Oct. 31 letter sent to US congressional leadership, AAI president and CEO John Bozzella raised the alarm on why such a deal is worrisome to automakers.

“If permitted to proceed, this transaction could have negative implications for the auto industry and increase costs for average drivers,” Bozzella states.

He points out that a combined Cliffs and U.S. Steel would control the US production of 100% of blast-furnace steelmaking, more than 90% of advanced high-strength steel (AHSS), 80% of body-in-white steel used for a vehicle’s structural frame, and 65% of US exposed grade steels used for automotive surface panels.

The letter says this potential acquisition calls for antitrust scrutiny from government regulators, with particular attention paid to “the potential for anti-competitive pricing of materials used by steel-reliant automotive manufacturers.”

“A consolidation of steel production capacity in the US will further increase costs across the industry for both materials and finished vehicles, slow EV adoption by driving up costs for customers, and put domestic automakers at a competitive disadvantage relative to manufacturers using steel from other parts of the world,” the letter concludes.

The AAI represents the full automotive industry, according to its website, from automobile manufacturers, to equipment suppliers, battery producers, and semiconductor makers.

Cleveland-Cliffs had not responded to SMU’s request for comment at the time of this story’s publication.

Laura Miller

Read more from Laura Miller

Latest in OEMs