Gene J. Pusker/AP
This is part of U.S. Steel’s Edgar Thomson plant in Braddock, Pennsylvania, on Monday.
CNN
—
A potential takeover of U.S. Steel by a rival Japanese steelmaker could face opposition from the U.S. government, according to comments from U.S. Secretary of Commerce Gina Raimondo.
“President Biden is very focused on ensuring that we have a vibrant steel industry in the United States for national security purposes,” Raimondo said in an interview with CNBC that aired Thursday.
Raimondo declined to mention U.S. Steel directly, but contract to be acquired He said that Nippon Steel, Japan’s largest steelmaker, had acquired the company for $14.1 billion, and said that any deal in which a foreign company acquires a U.S. steelmaker requires further consideration.
“I think it’s fair to say there’s going to be a lot of scrutiny because we have to protect the American steel industry, American production, American steel workers.”
US Steel was once most valuable company But as the country’s economy shifted from manufacturing to services, the 122-year-old company’s business declined. U.S. Steel’s $21 billion in sales last year was roughly equivalent to the income Walmart brings in every two weeks.
“We believe this combination is truly the best for everyone,” U.S. Steel CEO David Britt said Monday. “Today’s announcement is also beneficial for the United States, allowing us to strengthen our presence globally while ensuring a competitive domestic steel industry.”
The deal faces pushback from both the steel industry and U.S. lawmakers, even as U.S. Steel’s revenues have declined.
The United Steelworkers union said it would ask regulators to block U.S. Steel’s sale to a foreign company, calling the deal “greedy” and “short-sighted.”
The United Steelworkers union said it “remained willing to work with U.S. Steel throughout this process to keep this iconic American company domestically owned and operated, but in return, the company will continue to work with its dedicated employees.” “We pushed aside these concerns and chose to sell it to a foreign company.” President David McCall.
On Thursday, Raimondo echoed the unions’ concerns, saying the U.S. government “can never support an agreement that harms American workers, steel unions, and the steel industry.”
Raimondo is not the only government official to voice skepticism since Monday’s announcement of the deal.
Republican Sen. J.D. Vance of Ohio called on U.S. Steel to reject acquisition offers from foreign companies because of the steel industry’s role in producing military supplies.
“Today, a significant portion of America’s defense industrial base was auctioned off to foreigners for cash,” he said Monday.
Pennsylvania Democratic Sen. John Fetterman, a former mayor of Braddock, Pennsylvania, said he would work to block the deal, even though one of U.S. Steel’s first plants is still operating.
“Steel has always been about security, the national security of our country and the economic security of the steel community. I will use my platform and position to do whatever I can to stop this overseas sale. We will,” Fetterman said.
At least one of U.S. Steel’s domestic competitors has also voiced opposition to the deal.
“It’s important to keep production in the United States,” said Lourenco C. Goncalves, CEO of American steel company Cleveland-Cliffs. “We can’t allow foreign ownership. We can’t allow foreign companies to come in and clean up American jobs.”
Cleveland-Cliffs had previously expressed interest in acquiring U.S. Steel, and Gonsalves said the company remains interested in the deal.
– CNN’s Chris Isidore contributed reporting.
