OEMs

Auto Alliance Opposes a Potential USS-Cliffs Merger

October 31, 2023

The Alliance for Automotive Innovation (AAI), the association representing auto manufacturers making most of the vehicles sold in the US, has voiced its opposition to the potential acquisition of U.S. Steel by Cleveland-Cliffs.

In an Oct. 31 letter sent to US congressional leadership, AAI president and CEO John Bozzella raised the alarm on why such a deal is worrisome to automakers.

“If permitted to proceed, this transaction could have negative implications for the auto industry and increase costs for average drivers,” Bozzella states.

He points out that a combined Cliffs and U.S. Steel would control the US production of 100% of blast-furnace steelmaking, more than 90% of advanced high-strength steel (AHSS), 80% of body-in-white steel used for a vehicle’s structural frame, and 65% of US exposed grade steels used for automotive surface panels.

The letter says this potential acquisition calls for antitrust scrutiny from government regulators, with particular attention paid to “the potential for anti-competitive pricing of materials used by steel-reliant automotive manufacturers.”

“A consolidation of steel production capacity in the US will further increase costs across the industry for both materials and finished vehicles, slow EV adoption by driving up costs for customers, and put domestic automakers at a competitive disadvantage relative to manufacturers using steel from other parts of the world,” the letter concludes.

The AAI represents the full automotive industry, according to its website, from automobile manufacturers, to equipment suppliers, battery producers, and semiconductor makers.

Cleveland-Cliffs had not responded to SMU’s request for comment at the time of this story’s publication.

Laura Miller

Laura Miller is a reporter and editor for Steel Market Update. She has held a variety of positions within the steel industry since 2007, including reporting and editing for Steel Business Briefing/Platts, the Association for Iron and Steel Technology, and Kallanish Commodities, as well as marketing for what was then known as ThyssenKrupp Steel USA (now AM/NS Calvert). After a five-year hiatus working across other industries, she returned to steel in 2021 and has covered the flat rolled, tubular, and trade areas of the industry. She is a member of the Association of Women in the Metal Industries and a past-president of the AWMI Pittsburgh Chapter. She holds a BA in Latin American Studies from Edinboro University of Pennsylvania. She can be reached at laura@steelmarketupdate.com or 724-759-7869.