USW remains skeptical of USS acquisition despite Nippon's promises

The letter was signed signed by USW International President David McCall. It was also signed by Mike Millsap, director and chairman of the USW’s negotiating committee as well as director of District 7, which represents steelworkers in Indiana, Illinois, and Wisconsin.

Nippon letter

The USW statement was in response to a letter Nippon had written on Feb. 13 and that was filed today on a website dedicated to the deal.

“We understand that a change in ownership can create anxiety for the USW and its members,” Takahiro Mori, Nippon EVP and representative director, said in the letter addressed to McCall and Millsap. “However, I want to assure the USW and its members that NSC stands behind the USW agreements.”

The letter goes on to list benefits of the deal – including large increases in revenue, net income, and creditworthiness – for the combined company.

USW response

In heated language, the USW responded: “A promise from Nippon Steel, however – a Japanese corporation that is not authorized to do business in the United States – isn’t worth the paper it is printed on.”

USW went on to describe the possible difficulty of bringing Nippon to court in the event USW thought their agreements had been breached.

“Today, if we have a contractual dispute with USS that continues beyond arbitration, we can sue USS in US courts to enforce our agreements,” USW said.

“If Nippon Steel assumes our agreements, but hides behind its US shell company Nippon Steel North America, our ability to enforce our agreements and to collect on the company’s negotiated obligations will diminish,” the union added.

USW continued: “We as union members don’t deal in trust. We base our decisions on enforceable contracts that protect our employment security, our economic security, and our retirement security.”

A spokesperson for U.S. Steel said the acquisition by Nippon Steel would be good for all stakeholders. “Nippon Steel’s investment in U. S. Steel will strengthen the American steel industry for the benefit of American customers, employees, and communities,” they said.

“In addition to honoring all collective-bargaining agreements currently in place with the unions, Nippon Steel has pledged that no jobs will be lost as a result of the transaction, it will maintain the iconic U. S. Steel name and branding, and it will keep the Pittsburgh headquarters,” the spokesperson added.

Finally, the statement said: “We welcome the review of our transaction by relevant regulatory bodies, and we are committed to delivering shared success as we turn U. S. Steel into the best and most innovative steel company in America.” 

The proposed deal, valued at almost $15 billion, was first announced in December, and now faces regulatory hurdles.

New NDA

Separately on Monday, a report in Bloomberg announced that a nondisclosure agreement (NDA) had been signed by the USW and Nippon in order to “advance talks.” No further discussions had taken place between the two, though, the article said.

A spokesperson for Nippon confirmed to SMU that the NDA had been signed but had no further comment.