The United Steelworkers (USW) union remains skeptical of Nippon Steel's plans for US Steel's blast furnaces and coke plants, should the Japanese firm seal its takeover bid.
Tokyo-based Nippon Steel's promise to spend $1.4bn to upgrade integrated steelmaking facilities in Pennsylvania and Indiana have not quelled USW's concerns over the long-term job security of its members, USW president David McCall told Pittsburgh television station WTAE on 15 November.
Nippon has said it would invest at least $1bn to upgrade or replace the hot strip mill in the Pittsburgh area if its $15bn acquisition of US Steel goes through.
But Nippon has not answered USW's questions over the future of the Clairton coke plant or the two blast furnaces that are also part of the integrated Mon Valley Works facilities in western Pennsylvania, McCall said.
What the union wants from Nippon, he said, is "a commitment that they will continue to rebuild and keep in place blast furnaces, coke plants and finishing facilities so that we can melt, pour and finish steel in this country and within our facilities."
The union is concerned that Mon Valley Works could scale down flat-rolled steelmaking and shift production to US Steel's electric arc furnaces in Arkansas, a mill that does not employ union labor.
McCall also questioned Nippon Steel trade practices. He noted that last week the US Commerce Department found that Nippon exported hot-rolled steel sheet to the US at prices below market value between 1 October 2022 and 30 September 2023.
Nippon Steel vice chairman Takahiro Mori appeared to respond to McCall in an open letter to Mon Valley Works and Gary Works employees during his visit to Pittsburgh this week.
Nippon said it was committed to upgrading US Steel blast furnaces and coke plants at those facilities as part of its investment. Mori also promised that Nippon would not import steel slabs from overseas in lieu of rolling out steel made in the US.
The USW, which represents 3,500 members at Mon Valley Works, has opposed Nippon's bid for US Steel since it was announced in December 2023. The bid came as a surprise to the union, which favored an earlier offer by Cleveland-Cliffs to buy US Steel for $7.3bn.
Like US Steel and Nippon Steel, USW has taken its fight to Washington. The union spent $820,000 lobbying the federal government on a range of issues in the first half of 2024, including its opposition to the Nippon deal, according to lobbying disclosures with the US senate. The union spent $370,000 on lobbying during the first have of 2023.
The fate of the merger lies with the Treasury Department's Committee on Foreign Investment in the US, which is probing the deal for national security risks. Nippon expects that panel to make its recommendation to the White House by the end of 2024.
Nippon Steel did not reply to Argus' request for additional comment.
