These Steelworkers Want a U.S. Steel Sale. Biden and Trump Don’t.

The Washington Post

17:16 JST, December 21, 2024

CLAIRTON, Pa. – Hundreds of steelworkers stand in the 26-degree chill outside the local U.S. Steel plant at a pep rally of sorts, broadcasting their defiance and their desperation to the leaders that they believe have abandoned them.

On this mid-December afternoon, the crowd claps and cheers as more than a dozen speakers demand that the government approve Nippon Steel’s proposed $14.9 billion purchase of U.S. Steel.

The targets of their appeal include the White House, Congress – and their own union leadership.

The Japanese company has pledged in writing to spend $1 billion upgrading this plant and two others nearby, which otherwise would slip further behind the industry’s best. U.S. Steel says if the transaction collapses it will de-emphasize these antiquated facilities, “putting thousands of good-paying union jobs at risk.”

“This incredible deal will solidify our jobs for decades to come,” Jason Zugai, a local United Steelworkers union leader, tells the crowd. “We need the politicians to understand how this deal will affect our jobs, our families and our communities.”

These are the sort of working-class people that both Joe Biden and Donald Trump say they represent. Yet both presidents – and the head of the steelworkers union – oppose the corporate takeover that these steelworkers say is the last, best chance for the aging mills in Pennsylvania’s Mon Valley.

The battle over the proposed sale is expected to climax within days. On or around Dec. 23, the Committee on Foreign Investment in the United States (CFIUS), which has been reviewing the acquisition, is expected to recommend that the president torpedo it.

In a Dec. 14 letter to both steelmakers, the Treasury-led committee said it had “identified risks to the national security of the United States arising from the Transaction,” citing the potential for “a reduction in domestic steel production capacity” if Nippon Steel assumes control.

The Washington Post obtained a copy of the 29-page document.

Shares of U.S. Steel have lost nearly one-quarter of their value this month, a sign that investors believe that the deal is doomed.

Biden, who boasts of being the most pro-union president in history, has publicly opposed the transaction since March, when he said it was “vital” that U.S. Steel remain American-owned. President-elect Trump also says he is “totally against the once great and powerful U.S. Steel being bought by a foreign company.”

USW President David McCall’s office said that “most” of the 10,000 union members who work for U.S. Steel oppose the deal. Zugai, the vice president of Local 2227, disputed that assessment, and steelworkers from U.S. Steel facilities in Alabama, Indiana and Minnesota joined the Clairton rally by video link.

With the USW ranks split, politicians in Washington are taking their cue from the union leadership, not the rank and file.

“I’m following the union and [the Mon Valley workers] don’t run the union. They have their own opinion. I understand that. But at the end of the day, that’s not the representation that they elected,” said Sen. John Fetterman (D-Pennsylvania), who opposes the deal.

Fetterman was the mayor of nearby Braddock from 2006 until 2019 and still lives across the street from U.S. Steel’s Edgar Thomson plant. In an interview, he criticized Nippon Steel for only belatedly agreeing to devote substantial resources to reviving the Mon Valley Works. And he disputed the assessment offered by three local mayors that almost everyone in this area supports the deal.

“They can’t create a narrative that there’s an uprising and everyone is all supporting this. Not one resident has approached me and [said] we got to make this happen. Not once,” Fetterman said.

Chris Kelly, the mayor of neighboring West Mifflin, has tried. He complains that Fetterman has not returned his calls, although “come time for election, everybody wants to be associated with the working man.”

McCall, the USW president, has opposed Nippon Steel’s bid from the outset. The Japanese company has detailed what it says are legally binding plans for $2.7 billion in investments, including $1 billion for the Mon Valley. But McCall calls those commitments “unenforceable.”

In a final bid sweetener, Nippon Steel last week said it would give each steelworker a $5,000 bonus when the deal closes.

Late Thursday, McCall and Mike Millsap, the chairman of the union’s negotiating committee, issued a statement describing meetings they held this week with Mon Valley mayors. The meetings, including one with Nippon Steel representatives, made “no progress,” the union said.

Some local officials and steelworkers said they think McCall’s loyalties lie with Ohio steelworkers. They note that McCall favored an alternative bid for U.S. Steel by Cleveland-Cliffs, another U.S. steelmaker, which is based in Cleveland. Earlier in his career, the fourth-generation steelworker headed the USW’s Ohio district and he remains a member of a USW local in Cleveland.

Asked to respond, McCall said in a statement: “U.S. Steel and Nippon have used every trick in the book, from bullying to bribery, in their increasingly desperate bid to ram through their proposed transaction. This includes attempts to turn workers against each other by spreading misinformation and fear. The vast majority of our members see this for what it is however: a classic union-busting strategy intended to undercut workers’ strength.”

At stake in the battle to control U.S. Steel are some of the highest-paying blue-collar jobs in the United States. The typical steelworker earns an annual salary of about $63,000, but some take home more than $100,000.

Members of other unions also would lose significant earnings if the U.S. Steel plants eventually fail, according to Jeff Nobers, executive director of the Builders Guild, a joint initiative of western Pennsylvania’s construction trade unions and contractors.

“The building trades get tens of thousands of man-hours in those facilities every year,” he said. “Ironworkers, pipe fitters, electricians, carpenters, masons, painters, plumbers, virtually every trade out there in some way, shape or form is involved.”

The Nippon Steel fight looms as a potential last stand for the steel towns that line the river. These are hard-luck communities where household incomes lag the national figure. Clairton’s population has dwindled to roughly 6,000 from 20,000 in 1950. Where it once had three grocery stores, it now has none.

This region has been home to steelmaking for more than a century. Today, three U.S. Steel plants along the Monongahela River south of Pittsburgh employ about 4,000 men and women, including 2,500 union members.

With a fourth site outside Philadelphia, they comprise an integrated steelmaking unit, the Mon Valley Works, which converts iron ore into finished steel.

But the industry has been gradually moving away from this traditional approach, instead favoring more environmentally friendly electric arc furnaces that make steel from recycled scrap.

In 2021, U.S. Steel abandoned plans for a $1.2 billion investment in the Mon Valley Works following delays obtaining environmental permits.

That’s saddled workers with outdated equipment. At the Irvin Works a few miles away, the “hot mill” that shapes semifinished steel into sheets and bars dates to 1938. Changing its settings to make different types of steel requires workers to loosen giant screws with blows from a sledgehammer. Nippon Steel has promised to upgrade or replace the mill as part of its $1 billion retooling.

“A stand-alone U. S. Steel would not make the same financial commitments,” the American company said in September.

Steel mills in the United States today employ just 84,000 workers, down from 190,000 in the late 1980s.

Pittsburgh, the quintessential steel town, has reinvented itself as a hub of education and health care. But smaller communities like Clairton, Braddock and West Mifflin have suffered a steady economic erosion that only the Nippon Steel deal might arrest, local people said.

“We need to get this deal done. If not, the Mon Valley is dead,” Clairton Mayor Richard Lattanzi told the rally crowd.

If the Mon Valley Works wither, the hit on local businesses and municipal budgets will be severe.

Right outside the Clairton plant gate is a Speedway gas and convenience store and a local deli that both do a brisk business with millworkers. United Rentals, across the street, thrives by leasing lifts and other mechanical equipment to the plant. Tax payments by U.S. Steel cover roughly 30 percent of the $4 million city budget, according to Lattanzi, himself a former steelworker.

“I shop at that gas station. I order lunch from those pizza shops. If my job no longer exists, I have no reason to come down here,” said Chris DiPerna, a Clairton steelworker who lives in Hunker, about 25 miles southeast of the plant.

In North Braddock, empty buildings with boarded-up windows line city streets just blocks from the Edgar Thomson mill. Nearby, there is a reminder of better days: a striking stone building that Andrew Carnegie, who helped create U.S. Steel, dedicated in 1889 as the first of the nearly 1,700 libraries he donated to communities across the country.

Many valley residents have experienced earlier rounds of steel industry shrinkage and fear a repeat performance. In the 1970s, Kelly, the West Mifflin mayor, was a policeman in Homestead, about 10 miles up the river. As a young cop, he walked a lively beat outside the local mill that included “68 bars, 12 clubs, four speakeasies and two whorehouses,” he said.

The Homestead mill, once the largest in the world, closed in 1986, triggering a population exodus and a long era of municipal decline.

“It was sad. Guys I went to high school with lost their jobs, lost their homes. Six of my classmates committed suicide,” he said.

At Clancy’s Pub a few miles from the Clairton plant, three drinking buddies consider the prospect of U.S. Steel under foreign ownership. They acknowledge some initial misgivings over the sale of a company that once loomed so large in the American imagination that a mafia kingpin in “The Godfather Part II” boasts: “We’re bigger than U.S. Steel.”

News coverage of the steelworkers’ rally plays on the television behind them as Bob Foote hoists a bottle of Iron City Light. Many years ago, he worked on a U.S. Steel blast furnace while earning his college degree.

“I’m not fond of foreign ownership,” Foote said. “But if it infuses cash, improves the facilities and keeps the jobs here, most of the people I’m familiar with are for it.”