Union president backs Biden’s decision to block U.S. Steel, Nippon Steel deal
President Joe Biden denied a $14.9 billion deal that would have allowed Japan’s Nippon Steel to purchase U.S. Steel, marking a significant moment in a corporate and political saga that has lasted for more than a year.
It was one of the final weighty moves of his presidency for Biden, who cited national security concerns as one of the leading reasons for rejecting the merger.
“To have the government step up and recognize the importance to national security with the steel industry as a whole is huge,” said Jamie Sychak, president of the UAW Local 3303, which represents workers at Cleveland-Cliffs Butler Works. “Beyond that, it keeps an American icon in the industry an American company where it is protected from outside influence.”
The rejection follows a failed attempt by Cleveland-Cliffs, another major player in the North American steel industry that has local ties with the Butler Works facility, to acquire the 124-year-old company.
Before officials from Japan’s largest steel company announced their all-cash offer to U.S. Steel in December 2023, Cleveland-Cliffs offered to buy the company for $7.3 billion several months earlier in August.
U.S. Steel representatives rejected the offer that would have turned Cleveland-Cliffs into a top 10 steel producer in the world because of their inability to conduct appropriate due diligence at the time.
About nine months prior to Cleveland-Cliffs announcing its offer, officials signed a new four-year labor agreement with the United Steelworkers (USW) that went into effect on Sept. 1, 2022.
Representatives from the United Steelworkers union, which represents 14,000 employees at Cleveland-Cliffs and 11,000 at U.S. Steel, praised Biden’s willingness to protect national security and thousands of jobs.
“It was reassuring hearing all along that it was a bipartisan decision, whether it was the existing administration or President-elect Donald Trump,” Sychak said. “They were both against it, so that was refreshing. I’m glad to hear it was universal and not a partisan issue.”
Sychak said he doesn’t anticipate any job losses at U.S. Steel in the wake of the announcement.
“I honestly do not see this being a detriment to their employment or security of their jobs,” he said. “They’re going to keep making steel.”
Gov. Josh Shapiro shared those sentiments in a news release Friday, noting that Pennsylvania workers should be at the forefront of any future negotiations between U.S. Steel and other companies that could be in a position to buy.
“This matter is far from over,” he said. “We must find a long-term solution that protects the future of steelmaking in Western Pennsylvania and the workers who built U.S. Steel and built this country.”
Meanwhile, Nippon Steel and U.S. Steel released a joint statement that chastised the Biden’s decision and claimed that his “statement and order do not present any credible evidence of a national security issue.”
“Following President Biden’s decision, we are left with no choice but to take all appropriate action to protect our legal rights,” the companies said.
