BUTLER TWP — With Nippon Steel’s purchase of U.S. Steel blocked by executive order, a Cleveland-based steel manufacturer plans to place another bid when the deal is undone.

Cleveland-Cliffs CEO Lourenco Goncalves said at a Monday, Jan. 13, news conference held at steel manufacturer Cleveland-Cliffs’ Butler Works location that Cleveland-Cliffs will place a bid for U.S. Steel after its deal with Nippon Steel dissolves June 18 — the new deadline for a decision by Joe Biden that is currently challenged by two lawsuits filed earlier last week.

Several media outlets have reported that Charlotte-based steelmaker Nurco would join in the bid at that time, but Goncalves did not confirm or deny whether Nurco would be involved when at the news conference.

“We don’t have any ill intent or ill feelings about (other countries), but we like us first,” Goncalves said. “It’s America first, and we are not ashamed of that.”

Goncalves pledged not to shut down any U.S. Steel assets.

In 2023, Cliffs had made a bid for U.S. Steel in competition with Nippon Steel’s bid, but U.S. Steel’s board unanimously approved the deal with Nippon Steel before the end of that year. Cleveland-Cliffs’ bid was for $54 per share, while the Nippon Steel bid was $55 per share. Cleveland-Cliffs initially bid $7.3 billion before auction, which Goncalves said was $257 million lower than the accepted offer.

“I bid $54 because I was in firm belief that nobody would get there, but Nippon did,” he said.

President Joe Biden issued an executive order forcing the two companies to undo the deal by Jan. 3, citing concerns over national security. The Committee on Foreign Investment in the United States (CIFUS) extended the order to June 18 to allow litigation to unfold regarding whether a national security panel’s review of the merger was swayed by political considerations.

Litigation

U.S. Steel, Nippon Steel and Nippon Steel North America filed a lawsuit Jan. 6 alleging Goncalves and United Steelworkers International president David McCall engaged in anticompetitive conspiracy to block the deal.

Goncalves expressed excitement about facing Nippon Steel CEO Eiji Hashimoto in U.S. court, saying he’d “take his last penny” for the allegations of “thug” and “mafia boss” brought against him.

“You’re going to have to call me a thug and a mafia boss to my face, and then you’re going to have to prove it,” Goncalves said toward Hashimoto.

He continued that his lawyer will dismiss the lawsuit as baseless and a “tinfoil hat” story, but Goncalves will try to convince them not to so he can face Hashimoto in court.

“The Japanese people are friendly,” he said. “The Japanese government, not really. That’s my point.”

National security

Goncalves said transformers are on nearly every streetlight part of the electric grid and producing them abroad would open doors to potential tampering and remote electrical and equipment failures.

“You cannot have a country … like the United States of America not being able to produce steels that go inside the transformer, because transformers are literally everywhere,” Goncalves said. “You do not want to have these things produced abroad.”

Cleveland-Cliffs bought the Butler Works plant from AK Steel about five years ago when the plant was on the brink of shutting down. Goncalves said the plant was the last in the country producing grain-oriented electrical steel used in transformer production. The wait time for transformer maintenance is about nine months, Goncalves said.

Goncalves alleged illegal imports from Japan have hurt the steel industry both domestically and in Europe.

“Our technology to produce electrical steels is better than the Japanese who copied us,” Goncalves said.

He specifically mentioned the ability to replace coal with hydrogen in the production process which reduces carbon emissions. He said Indiana is home to the largest blast furnace in the Western Hemisphere.

Monopolization

Cleveland-Cliffs purchased Canadian steel producer Stelco for $2.8 billion in July which brought 79% of U.S. iron ore reserves and 70% of North American reserves under one company.

The company was reviewed by the Department of Justice when it purchased Stelco, so Goncalves is optimistic any antitrust investigation before Cleveland-Cliffs secures U.S. Steel will be simpler.

Nippon Steel’s lawsuit alleges the company also controls all North American electrical steel production, almost half its blast furnace steelmaking capacity and half its exposed automotive steel production.

Goncalves said he has the blast furnaces, but not the iron ore to feed them. He highlighted that Cleveland-Cliffs is the only producer of grain-oriented electrical steel in the country, and the company is in competition with U.S. Steel and will gain competition from Arsiron in Alabama.

“It’s a very open market,” Goncalves said. “The demand is incredible. There’s opportunities for us to accommodate another supplier, or even two suppliers of grain-oriented electrical steels.”

Another plant

Goncalves said the Butler Works plant is Cleveland-Cliffs’ most profitable, but another plant is coming to nearby West Virginia.

“This country needs transformers so badly, I’m going downstream with a brand new plan to produce transformers ourselves in Weirton, W.V.,” Goncalves said.

The plant will produce grain-oriented electrical steels like the Butler Works plant and will create about 600 jobs that were lost when the tinplate mill shut down in February. Butler Works employees at the news conference agreed the plant has idle capacity that can be used to build transformers in Weirton.

Goncalves said employees and the building are available, and the company has purchased equipment for the plant. He did not share any details about when the plant could open.