Why the USS-Nippon Steel Merger Must Not Be Approved

Since the surprise announcement that United States Steel (USS) agreed to sell to Nippon Steel (Nippon), the United Steelworkers (USW) has raised substantive concerns regarding national and economic security and collective bargaining issues with the proposed merger. These are the basic bullet points on why the union believes the merger is currently not in the best interest of workers and the country:

  • According to media reports, the Committee on Foreign Investment in the United States (CFIUS) in a 17-page letter identified national security concerns with the transaction. Reportedly, decisions by Nippon could "lead to a reduction in domestic steel production capacity"
  • Nippon Steel has repeatedly dumped steel products into the U.S. market, and its international subsidiaries have also been found guilty of injuring American steel workers, companies, and production capacity.
    • There are 13 recent cases where Nippon was listed as a respondent in a U.S. anti-dumping countervailing duty petition (five cases have been recently revoked, one case went negative).
      • In March of this year, Nippon opposed continuing tin plate tariffs, which would have negatively impacted USS facilities. The ITC voted to maintain duties against Japanese imports.
    • Nippon subsidiaries were found to be violating trade laws in other countries around the globe.
    • The CFIUS letter also stated that under Nippon ownership, USS would be less likely to seek tariffs on foreign steel importers.
  • The union has been in communication with USS and Nippon Steel since they abruptly announced the sale.
    • We have highlighted our concerns, including in direct face-to-face meetings, none of which have been addressed by USS or Nippon.
  • USS and Nippon Steel have not provided substantive plans for all facilities where USW has membership.
    • Nippon continues to blindly follow USS on an investment strategy that leaves workers at locations, like Granite City, Illinois; Ecorse and River Rouge, Michigan; and Lorain, Ohio wondering about their future.
    • USS' strategy, to be adopted by Nippon, has put their four Pennsylvania facilities - Mon Valley Works - in jeopardy, and based on recent comments, the facilities could very well end up being just a vehicle for shipping in Nippon's excess steel slabs.
  • The proposed merger puts USS assets under a Nippon Steel subsidiary that's really a shell company. This effort shields Nippon, a Japanese corporation, from potential liability, including pension obligations for tens of thousands of retirees. Collecting against a foreign company is always a concern because its assets are oftentimes beyond the reach of U.S. courts.
  • USS is a viable company that can continue to operate or could readily attract financing. However, their CEO, David Burritt, misjudged this sale, and now appears to be more concerned with a $70 million bonus than ensuring that American steelworkers, who have been supplying the U.S. for decades, have a secure future and that United States' national and economic security concerns are protected.
    • David Burritt has even gone so far as to threaten jobs if the merger doesn't happen - threatening American ingenuity and competitiveness for a shareholder payoff. This is classic union busting and should not be rewarded.