US Steel warns plants could close without Nippon sale

(MENAFN- AFP)

United States Steel warned Wednesday it could shut its headquarters and factories in Pennsylvania, a key swing state in the upcoming election, if a takeover by Japan's Nippon Steel is blocked.

Both Kamala Harris and Donald trump have come out against the sale as they campaign to win the White House, but US Steel planned a staff rally later Wednesday in support of the takeover.

"We want elected leaders and other key decision makers to recognize the benefits of the deal as well as the unavoidable consequences if the deal fails," said company chief David Burritt.

The company said in a statement that "without the Nippon Steel transaction, US Steel will largely pivot away from its blast furnace facilities, putting thousands of good-paying union jobs at risk."

"The lack of a deal with Nippon Steel raises serious questions about US Steel remaining headquartered in Pittsburgh," it added.

In December, US Steel sealed a $14.9 billion agreement to sell itself to Japan's Nippon Steel, which has promised investments to keep Pennsylvania factories competitive and newer "mini mills" in the American South.

But the transaction has been denounced by the United Steelworkers (USW) union, which on Wednesday dismissed the Pittsburgh rally as an "increasingly desperate" gambit.

The deal has also proven a tough sell politically with both the Democratic and Republican parties fighting it.

On Monday, at a Labor Day election campaign event in Pittsburgh, Vice President Harris mirrored President Joe Biden's stance, declaring that US Steel "should remain American owned and American operated."

Former president Trump has also vowed to block the deal, while his running mate J.D. Vance has led congressional opposition to the takeover, describing domestic steel production as a national security priority.

Pennsylvania is one of a handful of states that will decide the election on November 5, and is possibly the one on which the whole result will hinge.

- 'Future generations' -

US Steel has argued that the Nippon deal is needed to ensure sufficient investment in its Mon Valley plants in Pennsylvania, the earliest of which dates to 1875.

Nippon has promised to upgrade the plant, while also keeping US Steel's 1,000-worker office in downtown Pittsburgh.

To make its case, Nippon has sent executives to Pittsburgh to meet with officials and workers, while engaging with Washington powerbrokers by hiring of Trump's former Secretary of State, Mike Pompeo, to lobby its case.

On August 28, Nippon announced additional pledges to invest in Mon Valley to ensure it "operates for decades to come" and sustains "future generations of steelworkers in Pennsylvania."

Total planned Nippon investments in USW-represented sites amount to more than $2.7 billion, US Steel said.

But the USW described the latest Nippon statement as "a last gasp and desperate effort to save a merger on life support."

"A press release is not a contract," said the USW, which called the pledges "worthless."

The USW argues the deal is the result of mismanagement and underinvestment under Burritt and other US executives who would be "enriched" by the transaction.

"The merger sells out the future for workers, retirees, and communities and jeopardizes our nation's ability to produce the melted, poured and finished steel products that we need for our national defense and critical supply chains," the USW said.

The Mon Valley plants are the last steel factories in the Pittsburgh region following plant closures and mass layoffs in the 1970s and 1980s.

The plants still account for around 3,000 USW-represented jobs in Pennsylvania.

The total employment impact is more than 11,400 workers throughout the supply chain, with an estimated $3.6 billion economic impact, US Steel said.

The industry also cultural resonance as embodied by American football team the Pittsburgh Steelers.

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