Japanese takeover could spell long-term decline of U.S. Steel, union chief says

By John Geddie

(Reuters) - The head of a powerful labour union opposing U.S. Steel's sale to Japan's Nippon Steel said he has not received assurances that the would-be owners are committed to ensuring the lasting success of the strategic U.S. firm.

Nippon Steel's $15 billion takeover bid has been criticised by both President Joe Biden and President-elect Donald Trump and is subject to a national security review later this month by the secretive government panel CFIUS.

David McCall, the head of the United Steelworkers union, spoke to Reuters on Monday as Nippon Steel published details of the various commitments it has made to get the union's backing including on job security and investments in facilities.

One of McCall's top concerns is that Nippon may import steel into the U.S. from its international mills, a move he worries would erode a company that helped build the Empire State Building and arm allied forces in World War Two.

"When we've had discussions with them there's been nothing that would assure us that there's a long-term viability in the operations," McCall told Reuters via video call from his office in Pittsburgh, Pennsylvania.

"They (Nippon Steel) want a return on that investment and I understand that but it can't be harvesting our facilities and letting them slowly but surely over a period of time deteriorate so that they can then bring product in from their other facilities around the world and have access to our market."

Nippon Steel has previously denied it will import steel from its international mills after it seals the deal and repeatedly said it aims to become an "insider" in the U.S., a market critical to its future growth.

Nippon Steel and U.S. Steel did not immediately respond to a request for comment for this article.

McCall also criticised the Japanese suitors for not trying to stop or intervene in what he called "bullying" from U.S. Steel CEO David Burritt to close the deal.

Burritt told the Wall Street Journal in September that the firm would close steel mills and likely move its headquarters out of Pittsburgh if the sale failed.



"He's like a schoolyard bully demanding your lunch money," he said of Burritt, adding the threats had "scared the hell" out of some of his members.

Nippon Steel is racing to close the deal before Trump - who has vowed to block the transaction - takes office on Jan. 20.

Source: Investing.com