Biden's Decision To Block Nippon Steel Takeover Creates Uncertainty For U.s. Steel Workers

By blocking a Japanese company's takeover of U.S. Steel, President Joe Biden said he was protecting good jobs in the American heartland. He may be putting them at risk instead.

In making its nearly 15 billion bid for the storied Pittsburgh-based steelmaker, Nippon Steel had promised to invest 2.7 billion in U.S. Steel's aging blast furnace operations in Gary, Indiana, and Pennsylvania's Mon Valley. It also vowed not to reduce production capacity in the United States over the next decade without first getting U.S. government approval.

"They were going to invest in the Valley,'' said Jason Zugai, an operating technician and vice president of the United Steelworkers union local at a U.S. Steel plant in the Mon Valley. "They committed to 10 years of no layoffs. We won't have those commitments from anybody.''

Zugai and some other Mon Valley steelworkers supported the Nippon deal in defiance of the union's national leadership, which pressured the Biden administration to kill it.

Losing the Nippon-U.S. Steel deal "will be a disaster for Pennsylvania,'' said Gordon Johnson, who follows U.S. Steel stock on Wall Street as founder of GLJ Research. "I really don't understand. This is not in the interest of the workers. It's not in the interest of the shareholders of U.S. Steel.''