(NewsNation) — U.S. Steel says its $14.1 billion deal with Japan’s Nippon Steel will help address growing demand, but union leaders are denouncing it as “greedy” and “shortsighted.”
The combined company will be among the top three steel-producing operations in the world, according to the Associated Press, which cited 2022 figures from the World Steel Association.
Although both companies are positioning the deal as a best-case scenario, it remains to be seen how the transaction might impact overall manufacturing, pricing and labor.
What does it mean for jobs?
It’s unclear how the acquisition might impact the more than 22,000 U.S. Steel employees.
The United Steelworkers (USW) International President David McCall said the union will work to protect the “family-sustaining jobs” it bargained.
McCall was critical of the deal, saying Nippon might not have the capacity to live up to the union’s existing contract.
“Neither U.S. Steel nor Nippon reached out to our union regarding the deal, which is in itself a violation of our partnership agreement that requires U.S. Steel to notify us of a change in control or business conditions,” McCall said.
A company spokesperson directed NewsNation to the U.S. Steel website for information about the purchase. The website states that the deal honors all collective bargaining agreements. The spokesperson did not provide additional comment.
“NSC has a proven track record of acquiring, operating and investing in steel mill facilities globally – and we are confident that, like our strategy, this combination is truly Best for All,” U.S. Steel President and CEO David Burritt said in an official statement. “For our U.S. Steel employees, the transaction combines like-minded steel companies…”
Sen. John Fetterman, D-Penn., said Monday he would work to block the sale, calling it “wrong for workers and wrong for Pennsylvania.”
“I live across the street from U.S. Steel’s Edgar Thompson plant in Braddock,” Fetterman said in an official statement. “It’s absolutely outrageous that U.S. Steel has agreed to sell themselves to a foreign company.”
How will it impact prices?
Josh Spoores, steel analyst at CRU Group, told Yahoo Finance the announcement could be good news for buyers.
Further consolidation of the U.S. market would have increased prices and pushed manufacturers elsewhere, he said.
The deal has the potential to keep the domestic market competitive, which could encourage manufacturers to keep producing in the U.S. and employing U.S. workers, he told the outlet.
What does it mean for overall product manufacturing?
The acquisition will add 20 million metric tons of crude steel capacity to its 66 million tons, Reuters reported.
That means Nippon Steel will be a bigger supplier to the U.S. auto industry, which is producing more in the wake of recent labor union deals with major manufacturers.
“We are excited that this transaction brings together two companies with world-leading technologies and manufacturing capabilities,” NSC President Eiji Hashimoto said in an official statement.