US Steel says it could leave Pittsburgh if Nippon Steel sale falls through – Washington Examiner
The ongoing debate over the potential sale of U.S. Steel to Japanese firm Nippon Steel has generated significant political tension. Vice President Kamala Harris and President Joe Biden have publicly opposed the $14 billion acquisition, arguing that the steel company should remain entirely American-owned. Harris plans to emphasize this position during a campaign event in Pittsburgh, reflecting broader concerns about the implications of foreign ownership on U.S. jobs and industry.
U.S. Steel’s CEO, David Burritt, expresses a contrasting view, stating that the deal is crucial for the company to maintain its operations and workforce in Pittsburgh. He warned that without this investment, potential layoffs could occur. He noted that the deal includes $3 billion allocated for upgrading aging steel mills, which is vital for the company’s sustainability.
Despite political opposition, President Biden and Harris have not indicated definitive plans to block the sale, leaving the future of U.S. Steel and its employees in uncertain territory. The company’s past struggles with high production costs have compounded these challenges, highlighting the need for significant capital investment to secure its manufacturing base in the U.S.
US Steel says it could leave Pittsburgh if Nippon Steel sale falls through
U.S. Steel’s chief executive isn’t on the same page as the country’s top politicians who are fighting against Japan buying out the historic company.
U.S. Steel CEO David Burritt said the $14 billion deal opposed by Vice President Kamala Harris and former President Donald Trump is the only thing that could allow the company to keep its home base in Pittsburgh, according to the Wall Street Journal.
“We wouldn’t do that if the deal falls through,” Burritt told the outlet. “I don’t have the money.”
While President Joe Biden and Harris have voiced their disapproval of the acquisition, they have fallen short of making plans to block the deal.
The $14.1 billion deal earmarks $3 billion to invest in the older steel mills in Pittsburgh, but Burritt said the company wouldn’t be able to make the much-needed upgrades nor maintain workers’ jobs without the money.
With Nippon Steel as its parent company, U.S. Steel said it could delay laying off hourly workers through 2026.
Between 2010 and 2020, U.S. Steel struggled with high steel production costs, which cut into the company’s budget for equipment upgrades. When the company purchased a new steel mill in Arkansas in 2021, it canceled upgrades scheduled for a Mon Valley plant in Pennsylvania.
U.S. Steel has since doubled its production capacity at its plant in Arkansas to 6 million tons of steel annually.
The Arkansas mill, which produces steel from melting scrap, is less capital-intensive than making steel from melted iron ore. U.S. Steel makes most of its steel from melted ore but would switch to melting scrap if Nippon Steel doesn’t acquire the company. Ultimately, this would lead U.S. Steel to close the Mon Valley plant — the last steelmaking operation in Pittsburgh — and move its headquarters down south to follow the rest of its operations.
U.S. Steel said it supports 11,417 jobs in Pennsylvania and generates $138.2 million in state and local taxes annually.
Burritt shared that one of the major selling points of U.S. Steel going with Nippon Steel instead of other companies is it would be able to maintain its headquarters in Pittsburgh.
Regardless, the United Steelworkers union opposes the deal. The union wants Nippon Steel to commit to its planned investment.
U.S. Steel shareholders approved Nippon Steel’s offer of $55 a share in cash for the company’s stock last spring.
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