BRADDOCK, Pennsylvania — The fate of the Edgar Thomson Works, a massive steel plant that has hugged the same spot along the Monongahela River since 1875, became even more uncertain Friday morning when President Joe Biden announced he would block the sale of U.S. Steel to Nippon Steel as one of his last acts as president.
Biden said he blocked the $14 billion takeover of U.S. Steel by Japan‘s Nippon Steel on the grounds the sale was a threat to national security.
“It is my solemn responsibility as president to ensure that, now and long into the future, America has a strong domestically owned and operated steel industry that can continue to power our national sources of strength at home and abroad,” Biden’s statement read, adding, “It is a fulfillment of that responsibility to block foreign ownership of this vital American company.”
Gov. Josh Shapiro (D-PA) and Pennsylvania Lt. Gov. Austin Davis, who grew up in the shadow of one of the Mon Valley plants, released dual statements on the Biden move. Shapiro said, “Since the day this proposed deal between U.S. Steel and Nippon Steel was announced, my team and I have been engaged in intensive dialogue with all parties involved — and my top priority, as always, has been protecting Pennsylvania workers and fighting for a better future for our Commonwealth.”
The Montgomery County Democrat has told me in previous interviews he had been working nonstop to try to broker a deal with all parties. Shapiro famously saved a Cleveland-Cliffs steel plant in Butler last spring when the Biden administration had issued stern regulations that would have closed the plant permanently. Shapiro said the federal government has the sole authority to approve or block this deal.
Shapiro said he expects U.S. Steel to uphold its commitments to Western Pennsylvania and work collaboratively to ensure the future of American steelmaking takes place here in Pennsylvania, adding he will continue to engage with all interested parties directly to get a deal done.
“This matter is far from over — we must find a long-term solution that protects the future of steelmaking in Western Pennsylvania and the workers who built U.S. Steel and built this country,” Shapiro said.
Davis said that for him, the matter is personal. “I grew up and still live in the shadow of U.S. Steel plants,” he said. “I went to high school with people who work at the Mon Valley Works. I know the pain and frustration of my neighbors who watched as the steel industry collapsed, laying off thousands of workers and shuttering factories, while leaders in Washington did nothing. I’m deeply concerned this is happening again — and that is unacceptable.”
Nippon released a statement on Friday saying it was “left with no choice but to take all appropriate action to protect our legal rights.”
U.S. Steel was once the world’s largest corporation. Its origins reach back to business titans Andrew Carnegie and J.P. Morgan when, in 1901, Morgan financed the merger of Carnegie’s Carnegie Steel Company with eight other smaller steelmakers for just under $500 million.
Charles M. Schwab served as the first president of the merged entity, and almost immediately, United States Steel became the most iconic manufacturing company in the world. It placed Pittsburgh on the map as a powerhouse of industry, and over the decades, the city was so identified by U.S. Steel’s economic and cultural impact that its NFL franchise football team was named after it.
The former U.S. Steel building, located on Grant Street in downtown Pittsburgh, was hailed as an engineering marvel and honored the geography of the city with its triangular shape. It also honored the grit of its people with its “rusty nail” exterior.
It remains to this day the tallest skyscraper in Appalachia, but the logo on the top now reads UPMC.
U.S. Steel’s demise began in the ’70s — a collapse that eviscerated good, well-paying jobs, causing many families to have to sprint across the country in search of employment. One of the greatest examples of that fracturing of families, towns, schools, and social fabric is the number of “Steeler Bars” that are spread out across the country, with Pittsburgh expatriates looking for a linkage to home.
By 1984, the number of steelworkers in Pittsburgh dropped from 90,000 to 44,000 in just four years. The city’s unemployment numbers peaked at nearly 18 percentage points, and it took over 30 years to remake the city on the backs of higher education and medical facilities, followed by natural gas development in 2010.
Sentiments here in Western Pennsylvania over the blocked merger are mixed. Allegheny County at-large Councilman Sam DeMarco, a Republican, is for the sale to Nippon, telling the Washington Examiner that he is very disappointed to see Biden block the Nippon Steel-U.S. Steel merger. “U.S. Steel is the county’s largest manufacturing employer, and the failure to approve this deal may end up costing almost 12,000 direct and indirect workers their jobs and could lead to the region losing an estimated $3.5 billion in annual economic activity, as well as $140 million in state and local taxes,” he said.
Biden, DeMarco adds, “owns this.”
In a joint statement, U.S. Steel and Nippon Steel said they were dismayed by Biden’s decision to block Nippon Steel’s acquisition of U.S. Steel, adding his decision reflects a clear violation of due process.
“Instead of abiding by the law, the process was manipulated to advance President Biden’s political agenda,” they said. “The President’s statement and Order do not present any credible evidence of a national security issue, making clear that this was a political decision. Following President Biden’s decision, we are left with no choice but to take all appropriate action to protect our legal rights.”
Nippon Steel and U.S. Steel said they are confident their transaction would revitalize communities that rely on American steel, provide job security for American steelworkers, enhance the American steel supply chain, help America’s domestic steel industry compete more effectively with China, and bolster national security.
“Nippon Steel is the only partner both willing and able to make the necessary investments — including at least $1 billion to Mon Valley Works as a part of $2.7 billion in investment that it has already committed — to protect and grow U.S. Steel as an iconic American company for the benefit of the communities in which it operates and the entire American steel industry,” they added.
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President-elect Donald Trump has not issued a statement as of deadline.
Sen. John Fetterman (D-PA), whose home is next door to the Edgar Thomson plant, said the acquisition of U.S. Steel by a foreign company is wrong for Pennsylvania and that he would continue to do everything he can to block the sale.
This article was originally published at www.washingtonexaminer.com
