Union Files Grievances Against US Steel Over Sale to Japanese Company

In response, U.S. Steel indicated that in its eyes, everything is in order.
Union Files Grievances Against US Steel Over Sale to Japanese Company
A worker leaves the U.S. Steel Edgar Thomson Steel Works in Braddock, Pa., on March 10, 2018. Drew Angerer/Getty Images
Beth Brelje
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The United Steelworkers (USW) union has filed grievances against U.S. Steel Corp. over the pending $14 billion sale to Japan’s Nippon Steel.

The union recently sent a letter to members explaining that it'll enforce the successorship clause built into the union’s Basic Labor Agreements.

“The grievance process is designed to resolve disputes internally between U.S. Steel and the USW. The parties may ask arbitrators to get involved if issues cannot be resolved internally,” USW spokesman Tony Montana told The Epoch Times in an email.

The grievances allege that U.S. Steel violated union contracts when it entered into a sale agreement with an affiliate of Nippon Steel Corp. in December 2023.

“We know talk is cheap, especially coming from greedy corporations,” the letter to union members reads.

That’s why the union negotiated successorship rights into the basic labor agreements, it states.

“These rights are enforceable guarantees that a company seeking to buy our facilities cannot shirk its responsibilities to workers and retirees. Commitments like pensions, profit sharing, capital expenditures, retiree health care and more are all part of the compensation we negotiated in bargaining our contract,” the letter reads.

Any company that wishes to acquire U.S. Steel must have the intent and the financial capacity to honor the contracts, according to the union.

Company Defends Sale

In response, U.S. Steel indicated that, in its eyes, everything is in order.

“U.S. Steel complied with its obligations under the Basic Labor Agreements,” a spokesperson for the company told The Epoch Times in an email. “Our USW-represented employees are an integral part of our operations today and in the future, and we look forward to continuing to work together collaboratively.”

The union told members that U.S. Steel didn’t include the union in its negotiations with Nippon.

“Rather than reaching out to the union, they decided that Nippon Steel North America, a Houston-based holding company, would assume our labor, pension, retiree, and other agreements,” the letter reads, noting that the union didn’t agree to the arrangement and that it also has no information about the financial ability of the holding company to stand behind the obligations in the union’s current agreements.

“The USW is prepared to continue this grievance process all the way to its conclusion as we hold management accountable for trying to cash in by selling out American steelworkers and its shocking disregard for our contracts and its dedicated workforce,” the letter reads.

Transaction Scrutinized

The sale of U.S. Steel was announced just before Christmas and immediately resulted in bipartisan opposition in Congress over security concerns. Steel has long played an integral role in U.S. defense as the material used to build ships, tanks, airplanes, and weapons.

The concern is economic, too.

On Jan. 3, the House Labor Caucus and other congress members sent a letter to President Joe Biden stating that the acquisition “appears to deserve serious scrutiny” and telling the administration to use all available tools to ensure comprehensive regulatory review of the deal and its implications for U.S. workers and the nation’s industrial base.

Cleveland-Cliffs mining company in Ohio made a cash-and-share bid for the company in August 2023, valuing U.S. Steel at $7.25 billion. The union had favored that deal, which kept ownership in the United States.

Nippon agreed to keep U.S. Steel’s name and headquarters in Pittsburgh, but it'll become a wholly owned subsidiary of Nippon Steel.

In a November 2023 investor relations briefing, Nippon indicated that it intends to make steel where it’s needed, stating that its global strategy is to abandon the idea of maintaining domestic production capacity by earning marginal profits from exports and instead to build a system that captures local demand through local production.

Nippon is making moves around the globe. In early January, the company announced that it had closed the sale of a minority stake in Teck Resources, a major producer of steelmaking coal.

Teck is based in Vancouver, British Columbia, Canada. Nippon takes a 20 percent stake in Teck’s coal business, known as Elk Valley Resources, in exchange for its prior 2.5 percent interest in one of Teck’s coal operations and $1.7 billion in cash. In November 2023, Teck announced that the majority of Elk Valley Resources, 77 percent, was being sold for $6.9 billion to Glencore PLC, a Swiss multinational commodity trading and mining company.

The U.S. Steel sale to Nippon is expected to close in the second or third quarter of this year, but that could be delayed as the company needs approval by U.S. Steel’s shareholders, as well as regulatory approvals and regulatory review.

Beth Brelje
Beth Brelje
Reporter
Beth Brelje is a former reporter with The Epoch Times. Ms. Brelje previously worked in radio for 20 years and after moving to print, worked at Pocono Record and Reading Eagle.
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