With U.S. Steel’s proposed sale to Japanese firm Nippon Steel in peril, local officials are making a final attempt to build support for it — while other backers hope Gov. Josh Shapiro will weigh in as well.
Clairton Mayor Rich Lattanzi, for one, plans to speak at a Thursday-afternoon rally at the Clairton Coke Works in favor of the deal. Because without it, he said, “We would be done. I love my town and all that, but I'd be the first one to pack it in and go home and try to find a new hobby.”
The rally is a last gasp effort by the company and by Lattanzi to try to push the deal to go through. Both President Joe Biden and President-elect Donald Trump have signaled their opposition to the deal. Some reports suggest that the Committee on Foreign Investment, which reviews transactions involving foreign-owned companies, plans to block the deal on national security grounds.
Similar reports before this fall’s presidential election proved premature. But the committee has to make a decision within the next two weeks. And if the deal doesn’t go through, Lattanzi believes the plant will close within five years. If that happens, he fears, the town won’t just just lose thousands of jobs and a third of its tax base: It will also forfeit the other businesses and people that support, and are supported by, the plant and its workers.
By contrast, he said, “Nippon with the kind of money that they’re investing would be a great infusion for the Mon Valley works.”
Thursday’s rally is one of several last-ditch efforts to salvage the deal. On Tuesday Nippon offered a $5,000 “closing bonus” to U.S. Steel employees if the deal goes through. And on Monday the company offered some additional details about its plans. Last week Nippon sent a letter the president of the United Steelworkers Union, Dave McCall, promising that the $2.4 billion in commitments to improving facilities would cover long-term investments such as relining blast furnaces.
A spokesperson for Nippon referred WESA to letters it had sent to U.S. Steel employees this week. “We also affirmed to President McCall that technology sharing with U. S. Steel would not be counted against profit sharing and that we were committed to not pushing debt incurred to finance this transaction onto U. S. Steel,” Takahiro Mori, the representative director and vice Chairman at Nippon Steel Corporation wrote to employees.
The Steelworkers’ union didn’t respond to a request for comment by WESA, but in a Tuesday press release called Nippon’s the $5,000 offer “bribery.”
“We have seen this sort of corporate behavior before, and we know what it really means,” the Steelworkers’ statement said. “Nippon is begging union members to trade our long-term stability and bargaining power in exchange for a single payment.”
Lattanzi worked hard for the company for three decades and was a longtime Steelworkers union member. He doesn’t fault the union for doing its due diligence and being skeptical of Nippon’s promises not to move its operations to Arkansas, where the climate is hostile to unions and where the firm has opened other plants. But Lattanzi said he doesn’t think U.S. Steel has been properly maintaining its facilities. And he says he was reassured about Nippon’s intentions after speaking to executives and employees at one of the company’s West Virginia plants.
“I asked them some critical things: ‘Are you going to preserve these union jobs? Are you going to invest in the Mon Valley? Are you going to clean up the environment? Are you going to be a good community partner to myself in the city of Clairton?’” he said.
Lattanzi said the Nippon executive “looked me right in the face, eyes right at me and said, ‘Yes, sir.’” And while he said they wouldn’t make commitments three to five years into the future, “I believe they’re honorable people, I really do.”
Although the political winds are blowing in the opposite direction, Lattanzi thinks it’s still important to speak out one last time. “I'm showing up tomorrow because I've learned a long time ago, if you don't say nothing, then don't expect anything in return,” he said.
Could Shapiro save the deal?
A state manufacturing leader says Gov. Josh Shapiro must add his voice to the debate, and soon, to rescue the deal.
David Taylor, president and CEO of the Pennsylvania Manufacturers Association, said Shapiro is “the only one who conceivably could talk sense to Biden” to let Nippon Steel invest in U.S. Steel’s Mon Valley facilities.
“This is going to happen on President Biden's watch in his last days in office, and I can't see anybody other than Governor Shapiro potentially intervening to save the deal,” Taylor said.
“Our ally Japan, through Nippon Steel, is attempting to help us,” he said, adding he’s “embarrassed” the deal has faced so much opposition.
“It should never have taken this long,” he said. “We should never have given our allies this much grief, and I only hope that somehow we can save the day before the whole thing collapses.”
Shapiro spokesman Manuel Bonder said the governor is focused on the future of steelmaking in Pennsylvania. But while Shapiro has said he is seeking to protect jobs, he hasn’t taken a stance on the sale itself: “The final decision … will ultimately be made by the White House alone,” his office said in a recent statement. Bonder didn’t commit to a position on the sale Wednesday either.
“Governor Shapiro has been engaged with all parties in this deal throughout this entire process. He spoke to USW, U.S. Steel, and Nippon leadership the day the proposed merger was announced,” Bonder told WESA. “And he has stayed in close contact with the Biden Administration, state leaders from both parties, private sector leaders, and many others as he works to protect Pennsylvania jobs.”
Nippon this year hired one-time CIA director and Trump’s former Secretary of State, Mike Pompeo, to help guide the sale through the U.S. approval process. Taylor called Pompeo “an important and influential voice… who has a pretty good view of national security concerns and international relations.” But both Biden and President-elect Donald Trump have said selling U.S. Steel poses a national security risk.
Some local and state officials, meanwhile, have backed the sale. They include Republican Senate President Pro Tempore Kim Ward (R-Westmoreland) and Democratic Allegheny County Councilor Dan Gryzbek.
Gryzbek said that he thinks a sale to Nippon Steel offers the best potential to save the jobs and improve the region’s air quality. He and the county council voted against a measure earlier this year that would have signaled opposition to the deal.
Arguments about national security risks don’t make sense, Gryzbek said, since Japan and the U.S. already cooperate so much. And he also thinks the amount of money Nippon has offered for U.S. Steel reflects a genuine commitment to the region.
“Clearly this is something that they very much value,” he said. “It wouldn't really make a whole lot of sense to just go ahead and scrap something like the Mon Valley Works.”
Patrick Campbell, the executive director for the nonprofit Group Against Smog and Pollution, said his group isn’t taking a position on the sale, because it’s hard to say for sure what would be better for the region’s air quality.
Campbell’s group continues to push U.S. Steel to invest in air-pollution control technology. And while he’d like to see more sweeping changes in how steel is made in the Mon Valley, Campbell acknowledges that pollution could decrease if Nippon invested in the Mon Valley facilities.
“If they were maintained and upgraded as necessary, we surely would be seeing reduced emissions violations,” he said.
But Campbell is skeptical of the recent threats made by U.S. Steel to relocate if the deal with Nippon doesn’t go through. Campbell said the company has been threatening to leave the Pittsburgh area for decades, in an apparent effort to gain leverage in talks over labor contracts and environmental regulations.
He said it was “a terrible thing to do to workers, to put them into that kind of limbo where they have no idea if the future of their position is secure.”
