Steelworkers lose arbitration case against US Steel in their bid to derail sale to Nippon

The proposed takeover carries some heavy political weight in Pennsylvania, a state that both Vice President Kamala Harris and Donald Trump view as a mustwin in November’s presidential election. U.S. Steel is headquartered in Pittsburgh.

An arbitration board ruled Wednesday that U.S. Steel can proceed with its proposed acquisition by Nippon Steel — a deal that has faced strong opposition from its workforce.

The board, which was jointly chosen by U.S. Steel and the United Steelworkers to decide disputes between them, said Wednesday that U.S. Steel has satisfied each of the conditions of the successorship clause of its basic labor agreement with the union and that no further action under the agreement was necessary in order to proceed with the closing of the proposed transaction with Nippon Steel.

On Jan. 12, USW leadership filed a series of grievances alleging that the successorship clause in the BLA had not been satisfied.

The union has previously stated that it doesn’t believe Nippon fully understands its commitment to steelworkers, retirees and its communities.

USW has expressed concern about the enforcement of its labor agreements, having transparency into Nippon’s finances, as well as national defense, infrastructure and supply chain issues.

On Aug. 15, the Board of Arbitration heard evidence and arguments from both U. S. Steel and the USW on the matter.

On Wednesday, the Board of Arbitration determined the successorship clause has been satisfied and that, as required by the BLA, Nippon Steel has recognized the USW as the bargaining representative for USW-represented employees at U.S. Steel; provided reasonable assurances that it has both the willingness and financial wherewithal to honor the commitments in the agreements between U. S. Steel and the USW applicable to USW-represented employees; and assumed all USW agreements that are applicable to USW-represented employees at U. S. Steel.

The arbitration board heard evidence and arguments from U.S. Steel and USW last month.

The board said Wednesday that it recognized the repeated written commitments Nippon made to fulfill the requirements of the successorship clause and that no further actions were required by the company.

Moreover, the board cited Nippon Steel’s written commitments—including its commitment to invest no less than $1.4 billion in USW-represented facilities, not to conduct layoffs or plant closings during the term of the BLA, and to protect the best interests of U. S. Steel in trade matters—in support of its decision.

“With the arbitration process now behind us, we look forward to moving ahead with our pending transaction with Nippon Steel,” U.S. Steel President and CEO David Burritt said in a statement.

“With the arbitration process now behind us, we look forward to moving ahead with our pending transaction with Nippon Steel. With the significant investments and contractual commitments from Nippon Steel, we will protect and grow U. S. Steel for the benefit of our employees, communities and customers,” Burritt said. “We look forward to collaborative discussions with the USW and all our stakeholders.”

With the completion of this arbitration proceeding, all outstanding issues related to the BLA have now been resolved with respect to the transaction.

Following the ruling, Karl Kocsis, vice president and chief labor relations officer for U. S. Steel, said, “We commend the Board of Arbitration for its thorough review of the USW’s allegations and are pleased with its decision that U. S. Steel and Nippon Steel have fully complied with the BLA. U. S. Steel always has and always will continue to have the utmost regard for our union-represented employees and the role of the USW.”

USW said in a statement Wednesday that it disagreed with the arbitration board’s result.

“Nippon’s commitment to our facilities and jobs remains as uncertain as ever, and executives in Tokyo can still change U.S. Steel’s business plans and wipe them away at any moment,” the union said. “We’re clearly disappointed with the decision, but it does nothing to change our opposition to the deal or our resolve to fight for our jobs and communities that hang in the balance in this transaction.”

State Sen. Camera Bartolotta, R-Carroll Township, said she was relieved.

“I think this is going to be a big benefit, not only to our region, not just Pittsburgh, but the entire Mon Valley,” she said. “This is going to save jobs and keep the headquarters here in Pittsburgh.”

Nippon Steel, she said, has always been a “good player.”

“We have had a great relationship with Japan for decades,” she said. “And, the Mon Valley desperately needs this. They (Nippon) are a true ally.”

She believes it would have been a mistake to not move forward.

“It would have been a horrible mistake to not enter into this deal with a world renown manufacturer who will keep jobs here and keep steel being made right here in the steel city,” she said. “It’s called that for a reason, and we want that to continue.”

Bartolotta said she is confident in the deal moving forward, and knows stipulations have been put in place to ensure its success.

“Our union jobs are vital, and I don’t think a lot of people put enough weight on building grade jobs that will be affected by keeping U.S. Steel headquartered here,” she said. “This will affect thousands of lives, keep numerous businesses in the area. I am confident this will be a good thing for Pittsburgh, for the shareholders, for the workers, for the building trade workers and our entire area and their families.”

For her, it’s personal for the constituents she represents.

“We can’t see another business leave,” she said, referring to the potential closure of the Anchor Hocking plant in Charleroi.

“We are watching Anchor take this glass plant and those are more union jobs, 300 people, many of them third-generation workers and it will be a devastating loss, it is a devastating loss,” she said. “We can’t afford to lose any more major employers. We have to keep them here, we have to keep these families working to pay their bills. We have lost too much already, so this is a win for the Mon Valley and the greater Pittsburgh region.

“They have made promises that are signed, sealed and delivered and the benefit of keeping it here for at least the next 10 years, the investment it will make, this will be a renaissance or if anything a tourniquet. This is light on the horizon.”

U. S. Steel and Nippon Steel continue to progress through U.S. regulatory reviews of the pending transaction and work toward closing the transaction by the end of this year.