USS threatens to cut 'thousands' of jobs, move HQ if Nippon sale blocked

Burritt made the remarks after Vice President Kamala Harris, also the Democratic nominee for president, signaled her opposition to the $15-billion deal at a speech in Pittsburgh on Labor Day.

Former President Donald Trump, the Republican nominee, has said he would block the deal if elected. Likewise, President Joe Biden has criticized the sale of U.S. Steel to Japan’s largest steelmaker.

Burritt warns

“Without the Nippon Steel transaction, U.S. Steel will largely pivot away from its blast furnace facilities, putting thousands of good-paying union jobs at risk,” Burritt said.

“In addition to moving away from integrated steelmaking, the lack of a deal with Nippon Steel raises serious questions about U.S. Steel remaining headquartered in Pittsburgh,” he added.

Burritt noted that Nippon Steel last week pledged to invest more than $2.7 billion at U.S. Steel’s two union-represented integrated mills: Mon Valley Works in Pennsylvania and Gary Works in Indiana.

Those two facilities are U.S. Steel’s only remaining active blast furnace operations. Recall that furnaces at its Granite City Works near St. Louis have been idled as has the company’s Great Lakes Works near Detroit. (You can keep tabs on the status of North American blast furnaces here.)

“A stand-alone U.S. Steel would not make the same financial commitments,” Burritt said.

Nippon Steel is much larger than U.S. Steel and has deeper pockets. It produced 43.7 million metric tons (mt) of steel in 2023, making it the fourth-largest steelmaker in the world and the largest in Japan, according to data from the World Steel Association.

In contrast, U.S. Steel made 15.8 million mt of steel last year, making it the 24th largest steelmaker in the world. It was also behind competitors Nucor (21.2 million mt) and Cleveland-Cliffs (16.8 million mt).

USW lashes out

The United Steelworkers (USW) union blasted Burritt’s statement and alleged that he was motivated by a potential $70-million bonus if the Nippon deal closes.

“He is making baseless and unlawful threats, saying if the transaction with Nippon is rejected, the future of U.S. Steel as a viable company is at risk,” the USW said in a letter signed by union president David McCall.

The USW also officially confirmed what SMU has noted in the past: Much of the bad blood between U.S. Steel and the union stems from a decision to shift planned investments away from Mon Valley to Big River Steel, a non-union EAF sheet mill in Osceola, Ark.

U.S. Steel has since announced more investments in Big River as well as plans to expand the mill’s capacity and product offerings.

The USW said the expansions at Big River resulted in the idling of Granite City Works and Great Lakes Works, both union-represented integrated mills.

And the union cast doubt on Nippon Steel’s announcement about big investments in Mon Valley and Gary Works. “A press release is not a contract,” the union said.

The USW also said it has “every reason to believe” that Nippon would use U.S. Steel’s finishing mills to roll slabs imported from Japan instead of slab melted and poured in the US. The USW in addition called on U.S. Steel’s board to “hold Burritt accountable” for much of the time last year on a “failed” merger.

Background

Recall that the sale of U.S. Steel became public in August 2023, when a bid by rival steelmaker Cleveland-Cliffs spilled out into the open. U.S. Steel announced that Nippon Steel was the winning bidder in December 2023.

U.S Steel stockholders approved the deal in April 2024. And the sale had received all foreign regulatory approvals by May. But the deal remains under anti-trust review in the US as well as under review by the powerful Committee on Foreign Investment in the US (CFIUS).