Nippon Steel Corp. plans to invest an additional $1.3 billion in plants operated by United States Steel Corp. as the Japanese company steps up efforts to secure union support in its takeover bid, which is opposed by both President Joe Biden and Donald Trump.
Nippon Steel plans to invest in Mon Valley Works and Gary Works as part of its upcoming $14.1 billion acquisition of US Steel, the company said in a statement Wednesday.
Mon Valley flagship plant , where founder Andrew Carnegie built his first plant in the 1870s, and Gary are among US Steel's legacy operations that use traditional blast furnace steel production from iron ore. These types of plants are typically unionized, and the increased costs to extend their life cycles are part of Nippon Steel's attempt to win support from the United Steelworkers union, which has so far opposed the corporate merger.
The potential deal appears to have the center of a political storm, with politicians on both sides and at many levels expressing concerns about the takeover of the iconic American steelmaker. The deal is also subject to national security scrutiny, despite Japan being a close ally. The United Steelworkers' staunch opposition has increased political pressure on lawmakers in the election year.
Union opposition remained steadfast on Wednesday, and after Nippon Steel's announcement, the union group said: "Nippon is still trying to hide behind its North American shell company to protect itself from its contractual obligations to retirees and our communities, and it continues to need to respond to pressing issues affecting our critical supply chains and national security."
