The Board of Arbitration said United States Steel Corp.'s proposed deal with Nippon Steel fulfills a clause in the United Steelworkers contract.
Board members were selected by U.S. Steel and the United Steelworkers to determine disputes. It ruled Sept. 25 that U.S. Steel had met conditions of a successorship clause in the basic labor agreement with the union. The USW filed grievances on Jan. 12 about the potential acquisition. The board heard evidence from both sides on Aug. 15.
“With the arbitration process now behind us, we look forward to moving ahead with our pending transaction with Nippon Steel,” said David Burritt, president and chief executive officer of U.S. Steel, in a press release. “With the significant investments and contractual commitments from Nippon Steel, we will protect and grow U.S. Steel for the benefit of our employees, communities and customers. We look forward to collaborative discussions with the USW and all our stakeholders.”
The ruling also stated that “no further action under the BLA is required to proceed to closing the pending transaction between U. S. Steel and Nippon Steel.” Nippon Steel announced the acquisition on Dec. 18, 2023, and U.S. Steel stockholders approved the deal on April 12, 2024.
Nippon Steel has said it will invest $1.4 billion in U.S. Steel facilities, including $300 million to revamp Gary Works No. 14 blast furnace. Its representatives also said they will not lay off workers or close plants during the current BLA.
“U.S. Steel always has and always will continue to have the utmost regard for our union-represented employees and the role of the USW,” said Karl Kocsis, vice president and chief labor relations officer for U.S. Steel.
However, the USW issued a statement saying its members were disappointed with the arbitration's findings.
“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,” said Mike Millsap, District 7 director and chairman of the negotiating committee, and David McCall, international president.
Since the ruling is not legally binding, the deal still faces an uphill battle, according to Nippon Steel in a press release.
The U.S. Committee on Foreign Investment still is investigating the deal's national security risk. It is not scheduled to rule until after the November elections. Both candidates for president, former President Donald Trump and Vice President Kamala Harris, have said they are against the sale.
The USW's current contract expires in 2026. U.S. Steel plans to close the deal by the end of the year.
