Steel Mills

Letter to the editor: Nippon Steel deal good for USS and domestic manufacturing

Written by Scott Davidson

I would like to provide some of my opinions on the pending Nippon Steel Corp. acquisition of U.S. Steel. As of Feb. 1, 2024, I will have spent 52 years in the steel industry. I grew up in Weirton, W.Va., and I have seen a great many significant changes to the industry during this time.

For the past 14 years I have worked for Nippon Steel Trading Americas, out of our Pittsburgh office. To be crystal clear, it is a subsidiary of Nippon Steel Corp.  And while I work for Nippon Steel Trading Americas, I knew nothing about the transaction until it was announced. In short, this is just my own perspective as someone steeped in the industry.

There have been a great number of negative opinions and public statements about Nippon’s proposed deal with U.S. Steel. Both the United Steel Workers (USW) union and a number of politicians oppose the deal. The USW supports Cleveland-Cliffs’ offer. That offer is almost half of what Nippon Steel has proposed and what has been accepted by U.S Steel.

I don’t understand the USW opposition to Nippon Steel buying U.S. Steel and the union favoring Cleveland-Cliffs. If Cleveland-Cliffs were to acquire U.S. Steel, it would likely mean the end of a headquarters in Pittsburgh. Why would Cliffs maintain the U.S. Steel headquarters here given that they have their own in Cleveland, just a two-hour drive away?

The closing of the USS Pittsburgh headquarters would certainly mean a loss of jobs in this area. Also, there would likely be significant antitrust issues if Cliffs acquired USS and then owned every blast furnace in the United States as well as all the iron ore mines. Some facilities would likely need to be sold, and there would also likely be some consolidation of facilities with potential job losses.

Nippon Steel has agreed to keep the headquarters in Pittsburgh and to not have any significant layoffs. Also, Nippon Steel has only one significant steel production facility in the US, a joint venture with Arcelor Mittal in Calvert, Ala. In other words, there would not seem to be any antitrust issues. And keeping U.S. Steel and Cliffs separate would maintain a high level of competition among the existing steel producers in America.

The concern about national security seems a bit of a stretch to me. I am not sure how many products U.S. Steel produces that are essential to our military and that could not be made by other producers in the US. With Japan being such a strong US ally, the concerns of national security seem to be greatly exaggerated. If major events occurred that required steel products for our military, I feel the government could step in and mandate supplies where needed.

There are also some people referring to Pittsburgh as a steel hub. But the fact is that U.S. Steel operates in the Pittsburgh area just two blast furnaces, a BOF, a caster, and a finishing mill – as well as a large coke plant.

Having worked for a Japanese company for the past 14 years, I have come to know the Japanese as very forward-looking, long-term thinkers who are very trustworthy and loyal to their employees and customers. Nippon Steel also shares the green initiatives that U.S. Steel has undertaken. It in addition brings advanced technologies to the table that should benefit U.S. Steel facilities in the United Sates.

The fact is, U.S. Steel’s top executives were in favor of the company being acquired, they seemed to embrace all bids, and they felt, as do I, that the Nippon Steel option is the best for all concerned. 

But what do I know, I’ve been too dumb to get out of the steel business for 52 years.

Scott Davidson

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