Nippon Steel plans to invest another $1.3 billion in United States Steel plants, as the Japanese company steps up its efforts to win union support for a takeover bid that has been opposed by both U.S. President Joe Biden and former President Donald Trump.
Nippon Steel plans to make the investments in the Mon Valley Works and Gary Works as part of its pending $14.1 billion acquisition of US Steel, the company said in a statement on Wednesday.
Mon Valley, a flagship mill where founder Andrew Carnegie built his first plant in the 1870s, and Gary are among the legacy U.S. Steel operations that use traditional blast furnace production of steel from iron ore. Such facilities are typically unionized, and the increased spending to extend their lifelines is part of an effort by Nippon Steel to win support from the United Steelworkers union, which has so far opposed the merger.
The potential deal has been at the center of a political firestorm, with politicians from both sides of the aisle and at many levels expressing concern about the takeover of the iconic U.S. steelmaker. The transaction is also subject to a national security review, despite Japan being a close ally. The fierce opposition from the United Steelworkers has added to the political pressure on lawmakers in an election year.
The union opposition stood firm on Wednesday, with the union saying in a statement following Nippon Steel’s announcement: “Nippon continues to seek to hide behind its North American shell company to protect itself from its contractual obligations to retirees and our communities, and it still must respond to pressing concerns about our critical supply chains and national security.”
