Unions Threaten American Jobs By Opposing Nippon–US Steel Deal

What good are “good union jobs” if there aren’t any jobs?

Steelworkers contesting the acquisition of U.S. Steel by Nippon Steel of Japan might ask themselves that question since opposing the deal will mean just that. (READ MORE: Get Lost, Kid)

Nippon Steel wants to buy U.S. Steel’s mines and plants in Pennsylvania — just as Honda, Toyota, and BMW invested in manufacturing plants in Ohio, California, and South Carolina, which resulted in well-paying jobs for American workers. These good jobs are not, however, unionized, and that may be the reason why the unions are fighting the Nippon steel deal tooth and nail. As is the Biden-Harris Administration, which relies heavily on the support of union clout (even if the rank-and-file don’t support the Harris ticket, as in the case of the Teamsters).

The Nippon Steel Deal Would Mean New Jobs

To date, the United Steelworkers union is digging in to block the deal for all the wrong reasons. The Washington Post reported on Sept. 11 that “[i]n numerous exchanges, Mori, Nippon Steel’s executive vice president, and Hiroshi Ono, the chief executive of Nippon Steel’s North American unit, issued what they said were legally binding commitments to guarantee the union’s existing contract with U.S. Steel,” yet “the union demanded additional assurances in a frustrating back-and-forth that ultimately convinced the Japanese company the union was uninterested in making the deal work.”

The union has undermined negotiations by misleading the public about the intentions of Nippon Steel.

The history of the auto industry should motivate steel workers to avoid the same fate. At its peak in 1979, General Motors employed more than 600,000 people. Today it employs fewer than 95,000. The steel industry has seen similar declines. “In the 10 years starting in 1948, American steel mills averaged nearly 700,000 workers. Today only 83,000 people still work in the nation’s steel mills,” CNN reported in 2018. That number is even lower today. Analyst Tony Dutzik writes: “All told, about one-eighth as many people work in the U.S. steel industry as did in the 1950s.” (READ MORE: We Need Welfare Reform That Works)

Nippon made a generous bid late last year to take over U.S. Steel. It offered almost $15 billion. That was a lot more than Wall Street valued the company at and a lot more than steelmaker Cleveland-Cliffs offered for U.S. Steel earlier last year. The combination would make Nippon Steel (and thus U.S. Steel) the world’s second-largest steel producer. That would be good for employees here in the United States.

Nippon has, from the start, agreed that the company would remain based in Pittsburgh; it has “promised to honor existing agreements with the United Steelworkers (USW) trade union;” and it has promised “[n]o transfer of any of U.S. Steel’s production capacity or jobs outside the United States,” and “[n]o layoffs or plant closures or idling of U.S. Steel facilities as a result of the Transaction.”

All that means maintaining American jobs. Probably new jobs, because Nippon has promised to invest an additional $1.3 billion in two U.S. Steel plants. But instead of standing up for American workers, the Biden administration is trying to kill the Nippon-U.S. Steel agreement.

Unions Should Protect, Not Threaten, American Jobs

Biden — and even more so, Kamala Harris — wants to appease the leadership of the United Steelworkers union. But unions are supposed to try to protect jobs, not destroy them for the sake of politics.

Supposedly, the leadership of the steelworkers union is angry because Nippon didn’t reach out to the union leadership before it proposed the purchase. The company did reach out on the day the deal was announced, but it couldn’t have been done so earlier because that would have put the entire deal in jeopardy. (READ MORE: Saving Us From Scheming Landlords? Biden DOJ Sues Real Estate Tech Company RealPage)

Less than two weeks after the agreement was reached, Nippon representatives met with union leaders. Nippon provided all the information the union wanted, including a draft agreement letter in March. And yet the union won’t go along.

Reuters reported in April: “The USW said that while Nippon has made several commitments, including not laying off employees through Sept. 1, 2026 and defending U.S. Steel against unfair foreign trade, the letter ‘does not provide a meaningful basis for a resolution of the ongoing dispute.’ ”

Nippon is making all of its communications with the union available, and they might make for interesting reading —  especially for steel workers who support the merger and the jobs it could create. One actual steelworker said:  “I’ve had my qualms with U.S. Steel, but I know when to stand with them.”

The concern now is that, without the Japanese steelmaker’s support, “U.S. Steel would have to pivot away from its legacy blast furnaces, endangering union jobs and undermining the competitiveness of the American steel industry,” the company said in a statement. That would be bad for American workers.

Protecting and growing U.S. Steel would help Pennsylvania steelworkers, just as it has helped American autoworkers to have well-paying jobs at Honda, Toyota, and BMW plants in America.

Having jobs sent overseas to China isn’t going to help American steelworkers. The rank-and-file probably knows this. Hopefully, the leadership will get it — before the deal is no longer on the table.

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