Final Thoughts

Set to block?

The revelations of dissension within the ranks came as a Bloomberg report on Tuesday said President Biden was set to block the deal following a national security review.

As previously reported, the US Committee on Foreign Investment’s (CFIUS) review is expected to be completed later this month. The Bloomberg article, citing people familiar with the matter, pegs the completion date as Dec. 22 or Dec. 23.

When contacted for comment, a spokesman for Nippon gave SMU the following statement, highlighting how “politics” had gotten in the way of the deal.

“It is inappropriate that politics continue to outweigh true national security interests – especially with the indispensable alliance between the US and Japan as the important foundation,” the steelmaker said.

“From the outset of the process, we have engaged in good faith with all parties to underscore how the transaction will bolster American economic and national security by countering the threats posed by China,” Nippon added.

Note that the United Steelworkers (USW) union has been adamant in their condemnation of the transaction.

The statement concluded: “Nippon Steel still has confidence in the justice and fairness of America and its legal system, and – if necessary – will work with U.S. Steel to consider and take all available measures to reach a fair conclusion.”

Recall that the company has threatened legal action if the deal is blocked. The proposed $14.9-billion deal was announced in December 2023.

Nippon Steel sweetens the pot

As a deadline approaches, Nippon has reportedly sweetened the pot for U.S. Steel workers.

A press release from USS on Thursday confirmed a $5,000 bonus for workers if the deal closes.

“Nippon Steel announced that all eligible USW-represented U. S. Steel employees and eligible non-represented employees will receive a $5,000 bonus within 30 days of deal closing,” the release said. “Altogether, the closing bonus will result in a nearly $100-million aggregate payment to qualifying employees.”

The USW had another label for this payment: “simple bribery.”

“We have seen this sort of corporate behavior before, and we know what it really means. Nippon is begging union members to trade our long-term stability and bargaining power in exchange for a single payment,” the union said in a statement on Dec. 10.

The release was signed by Mike Millsap, District 7 negotiator and chairman of the union’s negotiating committee, and USW International President David McCall.

“This offer ultimately does nothing to change the stakes of the deal, the lasting damage it could do to our domestic steel industry or the grave implications for our national and economic security,” they said.

Final countdown…

As we rush headlong into the holiday season, the purported deadline looms.

Let’s say the CFIUS review goes to the White House on Dec. 23. Does that mean we (finally!) get a decision on the Nippon-U.S. Steel deal on Christmas Eve? And if that happens, who will see the news as a fabulous gift, and who will see it as a dirty lump of coal?

In the meantime, all of us at SMU wish you holiday mirth and cheer. And we promise to keep our eyes peeled, even at our holiday party, so that you’re apprised of the latest developments.