The USW's Struggle to Block Nippon Steel's Acquisition of U.S. Steel
The ongoing battle between the United Steelworkers (USW) and Nippon Steel over the proposed $14.9 billion acquisition of U.S. Steel is intensifying, with the USW leadership reiterating their opposition to the deal. USW, a key labor union representing steelworkers, believes that the acquisition would pose significant risks to workers' rights and national security. As the deal faces legal challenges, USW members are preparing for further actions to safeguard U.S. Steel’s future as an independent entity.
Key Developments:
• Nippon Steel's Bid: The $14.9 billion bid by Nippon Steel, Japan's largest steel producer, to acquire U.S. Steel has been at the center of the dispute. This acquisition was initially approved by U.S. Steel's board but has faced stiff opposition from USW, fearing that it could jeopardize jobs and disrupt the company's domestic operations. USW has long criticized foreign ownership of U.S. steel companies due to concerns about national security implications and the potential loss of American jobs.
• Biden’s Intervention: On January 3, President Joe Biden blocked the deal on the grounds of potential national security concerns. This blockage set off a series of court actions in both Washington, D.C., and Pittsburgh, as the companies look to challenge the decision. While the Biden administration acted to preserve American jobs and national interests, the legal battle is ongoing, and a potential deal brokered by President Donald Trump is also being considered as an alternative.
• Ancora’s Proxy Fight: As part of a shareholder revolt, Ancora, an activist shareholder, launched a proxy battle in an attempt to replace nine members of U.S. Steel’s board. Ancora holds around 1.9% of U.S. Steel's shares and has made its case for a leadership change, urging the company to withdraw from the Nippon Steel acquisition and reconsider its strategic direction. Ancora also advocates for a new CEO to bring fresh leadership to the company.
• USW’s Position on Ancora: In its latest letter to members, USW International President David McCall stated that the labor union would continue to scrutinize Ancora's plans. While USW acknowledges the shareholder group's efforts to influence the board, they have stopped short of endorsing Ancora’s takeover attempt. The letter expressed caution, highlighting that Ancora’s proposed changes could lead to further uncertainty about the future of U.S. Steel.
• Annual Meeting Tensions: The annual shareholders’ meeting of U.S. Steel is fast approaching, and Ancora is pushing for a delay to ensure that all pertinent information regarding the Nippon Steel acquisition is thoroughly examined before decisions are made. The USW also sees this as an important juncture in determining the future of the steelmaker.
McCall’s Strong Opposition to the Deal:
President David McCall and District 7 Director Mike Millsap have made it clear that they view the Nippon Steel deal as risky for both workers and the nation’s security. They warned that the acquisition could result in a shift in production and investment away from U.S. steel mills, particularly to Big River 2 in Arkansas, which would harm steelworkers in the Midwest.
The USW believes that the proposed deal would pave the way for Nippon Steel to transfer jobs and production to lower-cost operations outside the U.S., further eroding the American steel industry and undermining the workforce. USW has also raised concerns about potential job losses and wage reductions for U.S. Steel workers if the deal proceeds.
Cleveland-Cliffs’ Rival Bid:
At the same time, Cleveland-Cliffs, a key U.S. steel producer, made an unsuccessful rival bid for U.S. Steel in late 2023, which was blocked by Nippon Steel’s acquisition offer. This maneuver sparked additional friction between USW and the companies involved. The USW supports Cleveland-Cliffs’ offer, believing that it would provide more benefits for U.S. Steel’s workers compared to Nippon Steel’s approach.
Despite the rival bid and the proxy battle launched by Ancora, Nippon Steel is determined to move forward with its acquisition, and U.S. Steel’s board has continued to back the deal. The companies are currently facing legal challenges to the Biden administration's blocking of the transaction, with a potential court hearing in Washington, D.C., to determine the deal’s fate.
The Future of U.S. Steel and the Role of Labor Unions
As the proxy battle and legal disputes play out, the future of U.S. Steel remains uncertain. USW is taking a strong stand, not only in opposition to the Nippon Steel acquisition but also in defense of U.S. Steel’s independence. The union has made it clear that they believe U.S. Steel can remain a strong and successful company without foreign control, but this will require strong leadership and strategic investment in the company’s U.S.-based operations.
At the same time, the rising influence of activist investors like Ancora suggests that the boardroom battle over U.S. Steel is far from over. The upcoming annual shareholder meeting is poised to be a critical moment in determining whether U.S. Steel will remain independent or if a significant shift in leadership and strategy will lead to a new direction.
Key Takeaways:
• United Steelworkers (USW) continues to oppose Nippon Steel's $14.9 billion acquisition of U.S. Steel, citing risks to workers and national security.
• The Biden administration blocked the acquisition in January 2025, citing concerns about national security, and the legal battle continues.
• Activist shareholder Ancora has launched a proxy fight to replace nine board members of U.S. Steel and pull out of the acquisition deal.
• Ancora holds about 1.9% of U.S. Steel's shares and aims to install a new CEO while opposing the Nippon Steel acquisition.
• USW has expressed caution regarding Ancora’s efforts, stating they will carefully scrutinize the activist investor’s plans without fully endorsing them.
• U.S. Steel’s board remains committed to Nippon Steel’s acquisition, but USW believes the company should remain independent.
• Cleveland-Cliffs made an unsuccessful rival bid for U.S. Steel in December 2023, which was blocked by the Nippon Steel acquisition.
• The annual shareholders' meeting is a crucial moment for U.S. Steel, with Ancora seeking to delay it to gather more facts.
• USW leadership insists that U.S. Steel can remain strong without foreign control and is determined to safeguard American jobs in the steel industry.
The struggle for control of U.S. Steel is set to continue, with USW and Ancora driving competing visions for the company’s future, while legal and political challenges further complicate the situation.
