Sale of US Steel to Japanese Firm Clears Major Hurdle

An arbitration board has cleared the way for the acquisition of US Steel by Nippon Steel to proceed. The board, jointly chosen by US Steel and the United Steelworkers union, ruled in favor of US Steel, saying terms of the successorship clause in its basic labor agreement had been met, CBS Pittsburgh reports. The board said the Japanese company has recognized USW as the representative for employees and had "provided reasonable assurances" that it will honor its written commitments. The commitments include a pledge to invest $1.4 billion in union-represented facilities and to not lay off workers or close plants during the term of the agreement, reports the AP.

USW filed multiple grievances in January, expressing concern about labor and national defense issues. "With the arbitration process now behind us, we look forward to moving ahead with our pending transaction with Nippon Steel," US Steel CEO David Burritt said, per the AP. The union, however, disagreed with the board's decision. "Nippon's commitment to our facilities and jobs remains as uncertain as ever, and executives in Tokyo can still change US Steel's business plans and wipe them away at any moment," USW said in a statement. "We're clearly disappointed with the decision, but it does nothing to change our opposition to the deal or our resolve to fight for our jobs and communities that hang in the balance in this transaction."

Earlier this year, when he was still running for reelection, President Biden vowed to block the deal. The White House later downplayed the claim, saying the Committee on Foreign Investments in the United States is reviewing the $14.9 billion deal and could advise against it; its decision likely won't come until November. On the campaign trail, Vice President Kamala Harris and Donald Trump have both said they want to keep US Steel American owned, reports Reuters. On Tuesday, Burritt told CNBC he was confident that the deal would go through. He said investment from the larger firm would save American jobs, and US Steel would benefit from Nippon's advanced technology. "We won't be able to succeed without Nippon," he said. (More US Steel stories.)