The proposed $14.9 billion acquisition of US Steel by Japan's Nippon Steel Corporation has encountered significant scrutiny from the Biden administration, raising concerns about potential impacts on regional employment and national security. Pennsylvania Governor Josh Shapiro has actively engaged in negotiations with various stakeholders, including workers, the private sector, and federal officials, to safeguard thousands of jobs in the state. This development follows reports suggesting that President Biden might block the deal, which has been a contentious issue since it was first announced.
Governor Shapiro, a Democrat with aspirations for higher office, initially maintained a low profile regarding the deal. However, he publicly opposed the acquisition in July, expressing concerns primarily for union workers who have been vocal against the foreign takeover since its inception in December. The situation intensified when US Steel, headquartered in Pittsburgh, hinted at potential job cuts in the region if the deal were to collapse. This warning came shortly before news of the president's potential intervention emerged.
Shapiro emphasized the importance of retaining jobs in Pennsylvania, acknowledging that the final decision on the US Steel Nippon deal rests with the federal government. The Committee on Foreign Investment in the United States is currently reviewing the sale for any national security threats, and President Biden is expected to make a decision based on their recommendations. The governor's team is working diligently to influence the outcome, aiming to protect Pennsylvania's economic interests.
Senate President Pro Tempore Kim Ward expressed skepticism about opposing the deal, noting that Nippon Steel already operates a plant in her district without issues. She acknowledged public apprehension about foreign ownership but argued that the existing operations have been beneficial. US Steel, for its part, maintains that there are no national security concerns associated with the transaction, citing Japan's status as a close ally of the United States.
Despite reassurances, union leaders, particularly from the United Steelworkers, remain steadfast in their opposition to the deal. David McCall, a prominent USW negotiator, has resisted Nippon's promises of substantial investments in union facilities, citing national security risks. Mark Glyptis, a USW leader in West Virginia, supported McCall's stance, emphasizing the potential dangers of foreign control over the US steel industry.
Experts, however, find it unusual for CFIUS to identify a national security threat in a merger involving an ally like Japan. Historically, the committee's concerns have focused more on transactions with countries like China. Matthew Slaughter, a former CFIUS reviewer, noted that the public evidence does not suggest a security risk, attributing the controversy to domestic political considerations.
As the decision looms, various stakeholders, including elected officials, business leaders, and steelworkers, have rallied to express their views. Stefani Pashman, CEO of the Allegheny Conference on Community Development, argued that the Nippon Steel deal is the best option for the region's workforce and economic future, emphasizing the absence of a viable alternative.
