Nippon's Mori assures USS workers on deal, rebuts USW objections

“Following continued constructive dialogue with Pennsylvania Gov. Shapiro and others about the long-term needs of these facilities, Nippon Steel was happy to provide more specifics around our commitments in writing,” Mori said in the letter.

As previously reported, Mori met with Gov. Shapiro late last month, trying to gain support for the deal. No further details of that meeting were revealed.

Recall that the final hurdle is the US Committee on Foreign Investment’s (CFIUS) national security review. Nippon has said a decision is expected by the end of December on its $14.9-billion offer for Pittsburgh-based U.S. Steel.

Commitment to blast furnaces

The first USW leadership concern addressed was: Nippon Steel will follow the USS plan and would eventually transfer production from current facilities to Big River (an EAF mill in Osceola, Ark.)

Nippon clearly stated the company’s commitment to invest in U.S. Steel’s blast furnaces “are a break from U.S. Steel’s past plans, not a continuation.”

“We demonstrate a serious commitment to keep current USW-represented facilities operating well into the future,” the letter said.

Nippon also “pledged that there will be no layoffs, plant idling, or plant closures as a result of the transaction.”

Finally, Nippon said, “the only way to prevent the eventual transfer of production from current facilities to Big River is for our transaction to close.”

The letter pointed out that, “Otherwise, U.S. Steel has said it would not continue to invest in the unionized facilities and thus would likely close plants over time.”

Long-term viability?

Another concern addressed was the USW’s fear that while the deal may be good for the next few years, what about the long-term future?

Nippon said that it has made no less than $2.7 billion worth of capital expenditure commitments to USW-represented facilities.

“The goal of those commitments is to secure the future of the unionized facilities for decades to come,” Nippon said.

Some of those commitments include

• No less than $1 billion will be spent at Mon Valley Works in Pennsylvania, including to upgrade or replace the existing hot strip mill, and upgrade other facilities.
• Approximately $300 million will be spent at Gary Works in Indiana to revamp Blast Furnace #14.
• Nippon Steel also said it intends to maintain the operation of all blast furnaces currently operating and to schedule six blast furnaces (two at Mon Valley and four at Gary) for relining or major repair by 2030 in order to extend their useful lives for many years to come.

USS situation without deal?

Another USW contention the letter addressed was U.S. Steel is profitable and currently has billions of dollars in cash.

To this Nippon said that, “U.S. Steel has publicly stated that, without Nippon Steel’s investment, the commitments we have made to U.S. Steel employees and facilities will not happen.”

These and other concerns and responses are contained in the full letter here.

USW remains unmoved

The USW was not swayed by Nippon’s response.

A union spokeswoman sent the following comment to SMU from USW International President David McCall:

“Nippon Steel’s latest letter to USW members demonstrates its increasing desperation to repackage empty, unenforceable promises,” McCall said.

“Yet this communication, like those that came before it, remains riddled with the same exceptions and conditions as all its previous so-called commitments, allowing Nippon to back out or shift course for no other reason than changing business plans,” he added.

McCall reiterated the union intends to “keep fighting to ensure a long-term future for our nation’s steel industry and the thousands of good, family-sustaining jobs it supports.”