American steelmaker US Steel on Wednesday threatened a social plan if its takeover by Japanese firm Nippon Steel failed, placing the presidential candidates, both opposed to the merger, in a delicate situation.
US Steel said in a statement that without the takeover, it would forgo massive investments to modernize its Mon Valley Works (Pennsylvania) and Gary Works (Indiana) sites.
At the end of August, the Pittsburgh (Pennsylvania) company had committed to adding 1.3 billion dollars to the envelope promised for this investment plan as part of the takeover by Nippon Steel, making 2.7 billion in total.
“If US Steel were to continue alone”, without joining forces with Nippon Steel, the company “would not make the same commitments”, warned the management of this former giant of American capitalism, descendant of the empire of entrepreneur Andrew Carnegie.
On Monday, Democratic presidential candidate Kamala Harris said at a campaign rally that she wants to keep the steelmaker under American control.
US President Joe Biden had already said on several occasions that he wanted to block this acquisition, announced last December for an amount of 14 billion dollars, but suspended due to lack of authorization from regulators.
According to the Washington Post, the head of state is preparing to formally block the transaction.
Asked by AFP, the White House indicated on Wednesday that the report of the Committee on Foreign Investment in the United States (CFIUS), responsible for examining the file, had not yet transmitted its conclusions to Joe Biden. “This is the next step,” explained an official.
Republican candidate Donald Trump has promised to oppose the operation if he is elected.
The subject is very sensitive, because Pennsylvania is a key state for the American presidential election.
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In 2020, Joe Biden snatched victory there with just 80,000 votes ahead of Donald Trump, out of a total of nearly 7 million votes cast.
Four years earlier, the real estate developer had defeated Hillary Clinton by an even narrower margin of about 44,000 votes.
– “Thousands of jobs” –
US Steel announced Wednesday that a workers’ rally would be held that day at the steelmaker’s headquarters in support of the proposed takeover by Nippon Steel.
The United Steelworkers (USW) union called the announcement “pathetic.”
“This merger would mortgage the future of workers,” said the USW, which is opposed to the acquisition by Nippon Steel, for fear of social disruption, even though the Japanese group has committed to maintaining employment.
“Without the transaction with Nippon Steel, US Steel would essentially divest itself of its blast furnaces, putting thousands of well-paid, unionized jobs at risk,” the group insisted.
The possible failure to complete the merger between the two steelmakers “would seriously raise the question of maintaining the headquarters in Pittsburgh,” the company added.
On Tuesday, Nippon Steel once again tried to reassure the U.S. government and unions by saying that after its acquisition, U.S. Steel would remain “an American company,” with a majority of U.S. citizens on its board of directors.
The takeover plan has already been accepted by the board of directors and shareholders of US Steel.
Before Nippon Steel entered the scene, US Steel had rejected an offer from its American competitor Cleveland-Cliffs, which wanted to form a player capable of weighing on the world stage, ultra-dominated by Asian companies, Chinese in particular.
This proposal had received the approval of the USW union.
US Steel is considered an attractive target because it has already completed an investment plan to equip itself with so-called electric arc furnaces.
This technology is less expensive and less harmful to the environment than traditional blast furnaces because it uses electricity rather than coal.
It opened two sites, one in Farfield, Alabama in 2020 and the other in Osceola, Arkansas in 2023, which use electric arc.
Both are located in areas with weak union presence and are not affiliated with the USW.
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