HARRISBURG, Pa. – Nippon Steel Corp. raised its capital commitment by over $1 billion to invest in U.S. Steel’s plants amidst political and labor opposition. The Japanese company plans to acquire the iconic American steelmaker for nearly $15 billion.
Nippon Steel’s additional $1.3 billion commitment to upgrade facilities in Pennsylvania and Indiana comes on top of an earlier commitment of $1.4 billion.
The announcement was met with mixed reactions, with U.S. Steel’s president and CEO, David Burritt, praising Nippon Steel’s commitment as a step towards expanding U.S. Steel, while the United Steelworkers dismissed it as “lip service.”
Nippon Steel plans to invest at least $1 billion to upgrade the hot strip mill at the Irvin Plant near Pittsburgh, along with other facilities in Pennsylvania’s Mon Valley Works, and about $300 million to improve a blast furnace at Gary Works in Indiana.
These investments are aimed at strengthening the American steel industry and making U.S. Steel more competitive. The commitment also extends the life of the facilities and boosts productivity, according to Nippon Steel.
Despite ongoing political and labor opposition, Nippon Steel reiterated its expectation to close the transaction in the second half of 2024.
However, the United Steelworkers are against the deal, citing concerns about Nippon Steel’s North American shell company and its contractual obligations. The union is intent on keeping U.S. Steel U.S.-owned and ensuring the protection of labor rights and pensions.
The sale has drawn opposition from senior political figures, with former President Donald Trump and current Vice President Kamala Harris expressing their reservations about the deal during their campaigns.
The Department of Justice is reviewing the deal for antitrust compliance, and the Committee on Foreign Investment in the United States will evaluate it for national security concerns. The outcome of these reviews could determine the fate of the transaction.
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