The promise and the threat of Nippon Steel’s investment announcement

LAST WEDNESDAY, NIPPON STEEL made a promise.

The Japanese giant would invest “no less than $1 billion” into the U.S. Steel operations in the Greater Pittsburgh area.

“Nippon Steel believes that a transformed Mon Valley Works will expand U. S. Steel’s ability to serve a broader range of markets and customers, create additional high-grade steel capabilities, strengthen the competitive positioning of Mon Valley’s blast furnace operations and secure American steel supply,” the company said in a statement.

That sounds great. It also sounds familiar.

It was May 2019 when U.S. Steel made a similar announcement of a “truly transformational” billion-dollar investment. In April 2021, there was broad disappointment with another announcement.

U.S. Steel pulled back on those plans, not only halting the upgrades but saying it was closing three coke batteries at Clairton Plant.

History tells us to take this new promise with a grain of salt.

Nippon may well intend to do the pricey work of improving the Mon Valley Works’ ability to produce the quality and quantity of steel made while simultaneously making the whole process more energy efficient. That sounds great. Throw in some better air quality, and the proposal could make almost everyone happy.

But it is impossible to ignore one glaring fact.

None of this happens if the proposed purchase of U.S. Steel by Nippon doesn’t go through.

While stockholders have given the green light to the $14.9 billion sale, this isn’t as simple as buying a house. There is political opposition to the sale of a major U.S. infrastructure manufacturer to a foreign corporation.

It’s opposition that goes beyond party with both President Joe Biden and former president and GOP nominee Donald Trump speaking against it. The U.S. Department of Justice is one roadblock as it awaits documentation.

Other Democrats and Republicans have expressed concerns about the sale as a national security issue and regarding jobs.

With the uncertainty of the sale’s resolution still hanging there almost nine months after being unveiled in December, it makes Nippon’s promise — the same kind of investment proposed by U.S. Steel five years ago — seem less like a splashy ribbon cutting.

Instead, it could take on the air of a threat to those standing in the way. Let the sale move to completion — or be the reason this billion dollars isn’t invested in the region.