Biden's rejection of U.S. Steel-Nippon Steel deal may spell demise of steelmaking in Mon Valley, officials say
WEST MIFFLIN, Pa. (KDKA) — President Joe Biden's decision to block the $15 billion proposal by Japan's Nippon Steel to buy U.S. Steel has people in the Mon Valley fearing it will spell the demise of steelmaking in the region.
Nippon Steel promised to revitalize steelmaking in the Mon Valley, but its efforts to buy U.S. Steel may have sustained a fatal blow. On Friday, citing national security, Biden officially blocked the deal.
Biden's U.S. Steel decision met with disappointment
President Biden's decision to block Nippon Steel's $15 billion offer to buy U.S. Steel is being met with disappointment in West Mifflin, where the Japanese steelmaker vowed to spend $1 billion to upgrade the Irvin Plant.
The hot strip mill at the plant in West Mifflin is one of four U.S. Steel operations in the region, and West Mifflin Mayor Chris Kelly has taken Nippon Steel at its word that it would make monumental investments in the plant and the rest of the Mon Valley.
"They put it in writing," Mayor Kelly said. "They put it into the union that they would put over a billion dollars in. No layoffs, no plant closings, keeping the 10-year status quo. Nobody puts that into a business deal today. It's giving them everything they wanted."
But President Biden has invoked his right to block the deal citing what he calls "credible evidence" it "threatens to impair the national security of the United States." Biden's position was applauded by David McCall, the president of the United Steelworkers union, who has opposed the deal from the start despite support from the rank and file.
"We have no doubt that the president's decision was the right thing for our members and for America's national security," McCall said. "Throughout the past year when the proposed transaction has been under review, the union's first and only concern has been the long-term viability of our facilities and our members' jobs."
But the decision leaves the future of steelmaking in the Mov Valley in doubt. In a statement: U.S. Steel said: "We continue to believe that a partnership between Nippon Steel and U.S. Steel is the best way to ensure that U.S. Steel, and particularly its USW-represented facilities, will be able to compete and thrive well into the future."
And while Nippon promised to keep the headquarters in Downtown Pittsburgh and not shut down any operations, U.S. Steel has warned it may pull up stakes if the deal is voided. That prompted Governor Josh Shapiro to issue this warning: "I expect U.S. Steel to uphold their commitments" and "refrain from threatening the jobs and livelihoods of the Pennsylvanians who work at the Mon Valley Works and U.S. Streel HQ and their families."
But Kelly fears the worst.
"That they walk away," Kelly said. "They walk away, and what's left?"
"This is our strong ally," West Mifflin's mayor added. "This is no national security threat. This is, plain and simple, politics at its worst."
Steelworks left with uncertainty after Biden's decision
After the news came down on Friday, steelworkers described the scene as quiet at U.S. Steel's Clairton Coke Works, with the only discussion focused on the future. They want to know if they'll still have a job in a few years.
"I'm answering the questions, what's next? All day long, what's next," said Richard Tikey, vice president of Local 1557 Clairton.
He wasn't able to provide the answers on Friday, saying, "None of us have a crystal ball."
It's a perspective familiar to Andrew Macey, a maintenance technician at the Clairton Coke Works. He was laid off from a different U.S. Steel plant in 1986. He'd been optimistic the deal with Nippon would be approved. Then came a text on Friday morning.
"I felt numb," Macey said, explaining he immediately reflected on 1986. "I had that feeling come back to me of what now?"
Part of the concern stems from what U.S. Steel CEO David B. Burritt said months ago. Should the deal with Nippon Steel not go through, he said U.S. Steel would need to largely "pivot away" from making steel with blast furnace technology used in the Mon Valley for generations. In addition, Nippon Steel promised at least a billion dollars in upgrades to the Mon Valley facilities.
"Well today, one fella approached me and he said, 'I cannot believe this, that of all that Nippon is promising to do for U.S. Steel, that anyone could say that it wasn't good,'" Macey said.
Both the steelworkers who support the deal and the union who oppose it claim the vast majority of steelworkers are on their side.
After Nippon Steel promised not to cut steel-making capacity at its U.S. plants for at least 10 years, most of the holdouts he knew of still against the deal moved to support it, Tikey said.
McCall doesn't believe U.S. Steel will close plants, as the company's CEO has warned.
"The future in the Mon Valley, I think, is good," McCall said. "We'll continue to make those good quality products that customers demand there, and a responsible management will continue to invest in those facilities."
Multiple Mon Valley steelworkers told KDKA on Friday that it has been years since their plants have seen investments. It is part of the reason they were looking forward to Nippon Steel's ownership. Macey is still holding on to hope that could happen.
"I think they will litigate it and they will find that the facts are that the best thing that can happen for U.S. Steel is the acquisition by Nippon," he said.
Other steelworkers shared similar sentiments, not losing hope about the deal being finalized. However, steelworker Brian Pavlack sees another path. He's hoping President-elect Donald Trump will reverse Biden's decision. He and other steelworkers plan on sending a letter to Trump asking him to do just that.
Trump has indicated he would block the deal once taking office, but Pavlack is hopeful he could change Trump's mind. That belief is based on a short conversation he had with Trump during his rally in Latrobe in October. Pavlack said he told Trump about why the deal should be approved.
"Trump told me, 'OK, I'll look into it more when I become president,'" Pavlack said. "Yeah, it gives me hope."
Macey said he is planning to retire in the next year. Now, he hopes the next generation does not have to face what he did.
"It's just really tough at this point right now. But being a steelworker and steelworkers strong, we'll bounce back," he said.
What happens next for U.S. Steel?
With Biden blocking the deal and Trump vowing to do the same, the deal would appear to be dead. But in a statement, U.S. Steel vows to fight to save it.
"We will work closely with stakeholders, including government officials from Japan and allies and partners in the U.S., to take all appropriate action to protect our legal rights and secure that future," the statement said.
As a first step, U.S. Steel also will try to convince Trump to change his mind. But if that fails, it appears it will pursue legal channels to try to save the deal.
