Final Thoughts
Final thoughts
Written by Ethan Bernard
September 12, 2024
I think all of us know that sometimes courtships go wrong. A misplaced word or deed, and soon things go sideways, and not in the prices sense. Such could be the case with Japanese steelmaker Nippon Steel’s play for U.S. Steel.
Nippon has published a list of communications with the United Steelworkers (USW) regarding its efforts to gain the union’s support for the deal. This gives the public a bit of a picture of what has gone on since the proposed transaction was first announced last December. We all know the USW has opposed the transaction from the outset.
To me what emerges is a collection of “We promise to do this,” with responses of “That’s not enough,” or “We don’t believe you,” or “You have done X in the past.” At least that’s the extremely condensed version in this steelmaker said, union said story.
Of course in this back and forth I leave it up to our subscribers to form their own opinions on how both sides have handled the negotiations. The communications are available here.
What’s interesting to me is that this comes amid what appears to be final overtures by Nippon to save the deal. Even more interesting are some of the headlines that have made national publications.
Some U.S. Steel appeal would survive busted deal – Reuters, Sept. 12
Bad blood between USW, Nippon Steel may have doomed U.S. Steel deal from the start, emails show – TRIB Live, Sept. 12
Nippon Steel’s doomed effort to court union detailed in emails, letters – Washington Post, Sept. 11
Two “doomed” and a “busted.” While the articles all say the deal is still in play, the headlines seem to give a bit of a negative gloss. Now there are other editorials out there urging for the deal to be saved. At the same time, doomed and busted seem to me like being wheeled into the operating room and overhearing the doctors chattering, “It looks like he’s not gonna make it,” just before the anesthesia kicks in.
We’ve seen the consensus flip-flop from nearly sure thing, to so-so/maybe, to probably not, to… well, for those of you who went to Steel Summit, let’s just say the staff here at this point is thinking of consulting our Magic 8-balls.
Fortune-telling aside, on Nippon’s site here is a video from a Sept. 4 rally in Pittsburgh in support of the deal. Workers and politicians made passionate pleas to save the merger. From a USS press release on the rally, the company said: “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.”
Nippon’s communications notwithstanding, a lot of information remains out of the public eye. In a deal valued at over $14 billion, it stands to reason a lot of the terms won’t be disclosed. And it seems some suitors are waiting in the wings if things definitively head south.
We’ll be waiting to see how things turn out. As to what that outcome might be, we have no idea. But like in any rom-com, we hope a feel-good ending is in the offing, at least to the extent possible in the brutal arena of international business during a hotly contested presidential election.
Then again, as I was typing these very words, an email came swooshing into my inbox from a USW spokesperson. And in that cinematic way life works, the headline of the press release was: “No going back: Proposed USS sale threatens long-term, retirement security.”
Oh well, we’ll have to keep waiting on this cliffhanger, but Signs point to…
Ethan Bernard
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