President Biden blocks Japanese takeover of U.S. Steel. What does it mean for Gary, Indiana steel mill?
GARY, Ind. (CBS) -- President Joe Biden blocked a $15 billion proposal by Japan's Nippon Steel to buy U.S. Steel, a deal that Northwest Indiana officials said would have provided a much-needed economic shot in the arm in the region.
Gary Indiana Mayor Eddie Melton, the son of a former steelworker, supported the proposed merger, but the steelworkers' union opposed the deal, and Biden announced on Friday he was blocking the Japanese acquisition of U.S. Steel.
"This acquisition would place one of America's largest steel producers under foreign control and create risk for our national security and our critical supply chains," Biden said.
The deal would have invested $300 million into the Gary Works steel mill, U.S. Steel's largest plant.
But President Biden blocked the plan, saying it would make the nation less strong and less secure.
What could Biden's move to block the deal mean for Gary?
In a city fed by the steel industry, Cindy Clidaris feeds the steelworkers at Great Lakes Café in Gary.
"I do – with joy and love, and they all love me, I have to say," she said. "Gary Works is our main source."
The restaurant is right across from the Gary Works steel mill.
"This is a landscape that is unique to our area. It is," Clidaris said. "My windows, I never put curtains on, because I felt like this is part of a culture that I grew up with."
Gary Mayor Eddie Melton supported the proposed merger.
"This was going to be a tremendous opportunity to transform this city for generations. It was going to secure jobs for generations. Now, it's uncertain," he said. "This is definitely something I'm trying to figure out. Where do we go from here?"
Melton said Nippon Steel had committed $300 million to upgrade Gary Works.
"We know that Gary would've received an enhancement in our Blast Furnace Number 14, which is one of U.S. Steel's highest-producing blast furnaces in the country," he said. "That means more jobs. That would've meant more steel production for the United States."
The mayor said he has "grave concern" for Gary's economy that the president blocked such a big deal for one of the city's largest employers.
At its height, Melton said U.S. Steel had more than 30,000 employees in Gary, and now it's down to 4,000.
"I was advocating for a transaction that would've put us in a very strong fiscal position for years to come," he said.
Steelworkers union said merger would have threatened job security
The union representing steelworkers sided with Biden's decision to block the merger.
"While the deal would've been a huge windfall for U.S. Steel's investors, its management leadership, the deal advisors, it threatened the long-term security of our members," said United Steelworkers International President David McCall.
Melton said many steelworkers openly supported the deal.
"I think this was more of the union leadership's perspective in opposing this deal," Melton said. "The message I'm hearing from [local steelworkers] is we want to ensure that there our jobs are protected, there's no plant closures, there's not going to be any reduction in the steelmaking process, and our pensions are going to be honored now until the rest of our lives, and they're going to protect our families."
Clidaris chats with steelworkers every day, and knows what's on their minds. She said she can see both sides – but won't choose one.
"I take no sides on anything, because I'm here to feed," she said.
Mergers and acquisitions aside, Clidaris said she doesn't want her view in Gary to change.
"People need this place. They do," she said.
President-elect Donald Trump has signaled in the past that he also would have blocked the merger.
In a joint statement, U.S. Steel and Nippon Steel called the decision to block the deal "unlawful," hinting they could take legal action.
