Report: Nippon Steel offers 10-year guarantee to get approval of U.S. Steel acquisition

While many of President Joe Biden’s advisors favor the deal, he is siding with United Steelworkers union president.

By BRIAN C. RITTMEYER
TribLive

In a last-ditch effort to gain approval for its acquisition of U.S. Steel, Nippon Steel is offering a 10-year guarantee that it would not reduce production capacity at U.S. Steel’s mills in six states, including Pennsylvania, the Washington Post reported.

The newspaper cited a document sent to the White House.

It came a week after the Committee on Foreign Investment in the United States told the White House it was deadlocked on the proposed $14.9 billion sale, which Nippon first announced in December 2023. President Joe Biden has vowed to block the sale.

A spokesman for Nippon Steel declined to comment to TribLive on Tuesday evening. Messages sent to U.S. Steel media representatives seeking comment weren’t immediately returned.

The proposal reported Tuesday is aimed at appeasing the committee, which last week warned that Nippon’s takeover of U.S. Steel could lead to a decline in domestic steel output and risk national security. The companies have urged Biden to approve the deal.

While many of Biden’s advisors favor the deal, he is siding with United Steelworkers union President David McCall, who has said Nippon’s bid is bad for workers and questioned the company’s commitment to U.S. Steel’s unionized operations.

“Both U.S. Steel and Nippon have been deliberately misleading in their public statements and communications to our members, making splashy — but ultimately unenforceable — claims about the future of our facilities,” McCall said in a statement dismissing Nippon’s latest proposal.

A dozen mayors in and around the Mon Valley along with some local union leaders have voiced support. Nippon has pledged $2.7 billion in new investment for U.S. Steel’s unionized operations in the Mon Valley and in Gary, Ind.

According to the document seen by The Washington Post, Nippon is proposing giving the U.S. government a veto over any production capacity reductions at U.S. Steel’s mills in Pennsylvania, Indiana, Alabama, Texas, California and Arkansas. A similar pledge for a mostly idle mill in Granite City, Ill. would last for two years.

“By providing assurances against reductions in production capacity — which assurances will be legally binding and enforceable by the U.S. Government — Nippon Steel is underscoring the ironclad nature of its commitments to U.S. Steel and its union-represented employees,” the companies’ Dec. 30 letter said. “By contrast, without this Transaction, given limited resources, U.S. Steel will revert to its pre-Transaction strategy of deprioritizing existing, union-represented facilities.”

While Biden faces a Jan. 7 deadline for a final decision, administration officials are considering conditioning approval of the takeover on Nippon complying with more requirements, such as preserving American jobs, which would leave a final decision to the incoming Trump administration.

However, President-elect Donald Trump has also vowed to block the deal if the decision came to him.