US Steel Issues Warning Over Job Cuts and HQ Relocation If Nippon Steel Acquisition Falls Through
United States Steel Corporation has raised alarms that the collapse of its merger with Nippon Steel could jeopardize thousands of American union jobs and hinted at the potential closure of several steel mills, along with a possible relocation of its headquarters from Pennsylvania.
This cautionary statement was issued on Wednesday, amid increasing bipartisan resistance to Nippon’s ambitious $14.9 billion bid for the American steel giant, particularly as the November presidential election approaches. This development was initially reported by The Wall Street Journal.
Vice President Kamala Harris expressed her desire for US Steel to remain “American owned and operated.” In contrast, her Republican opponent, Donald Trump, has vowed to obstruct the deal if he assumes office. Reports suggest that the White House is nearing a decision to prevent Nippon Steel’s acquisition of US Steel due to national security issues.
US Steel indicated that a failure to secure approval for the merger would result in the company not making the same financial investments it had planned. The steel producer has previously reduced its workforce, including layoffs in Michigan.
Nippon Steel announced last week its commitment to invest over $2.7 billion in unionized facilities, specifically at Mon Valley Works in Pennsylvania and Gary Works in Indiana, aiming to bolster the manufacturing sector in these regions.
Nippon also noted that should the deal proceed, the principal senior management and a majority of the board members of the American subsidiary would be U.S. citizens.
The acquisition plan has successfully secured all necessary regulatory approvals from jurisdictions outside the U.S., as well as endorsements from US Steel’s shareholders. It is currently undergoing regulatory scrutiny within the United States.
David Burritt, CEO of US Steel, stated, “We want elected leaders and other key decision-makers to recognize the benefits of the deal, along with the unavoidable consequences if the acquisition does not materialize.”
He further elaborated that without the merger, “US Steel will largely pivot away from its blast furnace operations, putting thousands of well-paying union jobs at risk and adversely affecting multiple communities across various operational locations.” Burritt concluded by saying that the failure of the acquisition would pose “serious questions about US Steel’s future headquarters in Pittsburgh.”
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