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An arbitration board has granted permission for U.S. Steel to move forward with its planned acquisition by Nippon Steel despite substantial opposition from its workforce.
This decision comes from a board selected by both U.S. Steel and the United Steelworkers (USW) to address disputes between the two parties. On Wednesday, the board determined that U.S. Steel met all requirements specified in the successorship clause of its labor agreement with the union, meaning no further steps were needed to complete the proposed transaction with Nippon Steel.
The USW filed numerous grievances in January, claiming that the successorship clause had not been adequately fulfilled. The union has consistently expressed skepticism about Nippon’s understanding of its responsibilities towards steelworkers, retirees, and the surrounding communities. Concerns were raised regarding the enforcement of labor agreements, transparency into Nippon’s financial situation, and implications for national defense and supply chains.
Last month, the arbitration board reviewed evidence and presentations from both U.S. Steel and the USW.
The board acknowledged Nippon’s repeated written assurances to comply with the successorship clause, declaring that no further actions were necessary by the company. These commitments include a pledge from Nippon to invest a minimum of $1.4 billion in facilities represented by the USW, a promise to refrain from layoffs or plant closures during the labor agreement, and an assurance to prioritize U.S. Steel’s interests in trade matters.
David Burritt, President and CEO of U.S. Steel, expressed optimism following the arbitration process. He stated, “With the arbitration process now behind us, we look forward to moving ahead with our pending transaction with Nippon Steel.”
Conversely, the USW issued a statement on Wednesday expressing its disagreement with the arbitration board’s ruling.
The union remarked, “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. 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.”
President Joe Biden has previously voiced his opposition to the potential acquisition of U.S. Steel by Nippon Steel, yet the federal government has not moved quickly to prevent the deal from proceeding.
Earlier this month, White House officials did not rule out that Biden may formally block the acquisition. However, the required report from the Committee on Foreign Investment in the United States has yet to reach the White House.
This proposed takeover is politically significant in Pennsylvania, a critical state for both Vice President Kamala Harris and former President Donald Trump in the upcoming presidential election. U.S. Steel’s headquarters is situated in Pittsburgh.
Both Biden and Trump, as well as Harris, have expressed their disapproval of the acquisition. Harris is set to deliver a speech at the Economic Club of Pittsburgh on Wednesday, where she plans to outline new policies aimed at enhancing domestic manufacturing while adopting a “pragmatic” approach, according to a senior campaign official who requested anonymity ahead of the event.
Source: Associated Press