Trump Should Approve U.S. Steel-Nippon Deal
By Jezree Friend
Steel is tough. So is U.S. Steel. The iconic company has formed a huge part of western Pennsylvania’s identity and economy for more than a century. But for U.S. Steel to stay strong and viable for another century, I believe Washington, D.C., needs to greenlight the landmark deal to revitalize the business with historic new investment and advanced technology.
U.S. Steel was America’s first billion-dollar company. Through war and peace, booms and busts, from the Great Depression to globalization, it has kept churning out the America-made steel we need to keep our nation strong, prosperous and secure. But economic trends and unfair practices from foreign rivals including China have wounded this American powerhouse. Once the world’s number one steel company, it has fallen all the way to 24th. The company that once employed 340,000 Americans during World War II only supports about 20,000 jobs today with some of its large signature plants such as the Homestead Works forced to close.
Even as other major domestic steelmakers filed for bankruptcy, U.S. Steel has hung tough and fought to stay viable. In the last few years, global supply chain dynamics helped buoy prices and bought the industry time to adapt. Now U.S. Steel has found a long-term solution that would protect America’s steel industry for decades to come: a joint venture with the Japanese company Nippon Steel.
The partnership would launch U.S. Steel right back into global powerhouse status, creating the world’s third-largest steel company. It would inject billions of dollars of new investment, an economic boost with ripple effects across Pennsylvania and the heartland. Plant facilities would see major remodeling and construction. In my view, union steelworkers’ jobs would land on safer footing for the long haul, and future expansion could create new jobs. Perhaps most important of all, unlike other potential deals that have been floated, this investment would unleash badly needed modernization. It would take the Japanese partner’s advanced technologies and infuse them straight into U.S. Steel.
A view of the U.S. Steel Edgar Thomson Works on January 21, 2020, in North Braddock, Pennsylvania. Here, Jezree Friend of the Erie-based Manufacturer & Business Association urges President Donald Trump to approve Nippon Steel’s proposed joint venture with U.S. Steel.
Nobody understands the stakes like the steelworkers on the front lines — and some support the deal in spades. At Irvin Works in the Mon Valley for example, union leaders say 95% of the union workforce wants the partnership to move forward. “We have a hot mill from 1938 [and] it’s not going to last much longer,” explained Jason Zugai, a crane trainer at the plant and vice president of the union local. After a visit from Japanese engineers, Nippon agreed the new partnership would dedicate at least $1 billion just to upgrade the Irvin plant alone. “That went a long way” in winning over the workers, Zugai said. Other major investments could come at U. S. Steel’s central R&D lab in Pittsburgh and other key facilities in Arkansas and Indiana, where the once-mighty Gary Works sorely needs to be revamped.
As a leader at the Manufacturer & Business Association, I can attest that a thriving, rebuilding steel industry would bring added prosperity to all sorts of industries and lift entire communities. When our key sectors are healthy and growing, everyone wins.
Many of us may have instinctively flinched at the idea of U.S. Steel partnering with a foreign company. Critically, the deal on the table would leave all decisions on trade matters in the hands of U.S. Steel’s American citizen officers and independent directors whom the Treasury Department’s foreign investment watchdog arm would approve. Moreover, the United States and Japan are aligned in our shared competition with China, and Nippon Steel already has a 40-year history operating in the United States.
This is a win-win between friends. It is exactly the kind of America First deal that President Trump and his team have promised. Instead of America offshoring jobs and investment dollars to foreign countries, the tide has reversed. Now other countries’ leading companies want to invest in the United States.
The stark reality is that the status quo will not work. If President Biden’s decision to block the deal remains in place, U.S. Steel believes it will have to shift production and American jobs could be at risk.
Nippon changes terms after Biden block: President Trump says Japanese company will ‘invest heavily’ in U.S. Steel, not own it
We cannot risk our domestic steel industry losing its best chance to regain a competitive edge after years of unfair overproduction, undercutting and dumping by Chinese rivals. I believe President Trump’s promise to unleash a golden era of American manufacturing and business is making a difference, but to forge America’s future, U.S. Steel needs direct investment and technology that only the Nippon deal will bring.
U.S. Steel was key to America’s previous golden age. In the 20th century, its steel built some of our most iconic bridges and skyscrapers and enabled many thousands of blue-collar Pennsylvanians to build wealth and support their families. If President Trump wants to usher in a new golden age, as he says himself, “steel is a business you need to have.”
The president is right — and western Pennsylvania knows it. We need him to reverse President Biden’s decision and approve this enormous investment that will check China’s dominance, save Pennsylvania jobs and rescue U. S. Steel.
Jezree Friend is the vice president of the Manufacturer & Business Association. With offices in Erie and Pittsburgh and members across Pennsylvania, their vision is to see businesses thrive within the free-market system.
