The economy of Pittsburgh, Pennsylvania has grown far beyond its steel roots. Yet during President Joe Biden’s visit Wednesday, his only stop was the United Steelworkers headquarters.
The union base provided an ideal backdrop for the president to announce an increase in tariffs on steel imported from China. Heavily subsidized Chinese steel and aluminum makers have flooded global markets with discounted metals, costing Pennsylvania jobs, he said.
But Biden had a second message as he spoke to cameras, flanked by workers holding USW signs: that US Steel, America’s industrial icon based in Pittsburgh, should remain “an American company, operated by American unionized steelworkers – the best in the business.” world”.
The event highlighted how the United Steelworkers Union, which has just 60,000 members in the steel industry, inserted itself into the presidential election and into Washington’s relations with its biggest geopolitical rival.
By flexing its political muscle to block Nippon Steel’s proposed $14.9 billion takeover of US Steel, the union has also complicated relations with one of Washington’s closest diplomatic allies, Japan.
Both Biden and Donald Trump, his rival in November’s presidential election, opposed the Japan deal because they court blue-collar workers — and their union representatives — in swing states like Pennsylvania. USW President David McCall, a vocal critic of the Japanese group’s candidacy, was invited last week to a state dinner at the White House in honor of Fumio Kishida, the prime minister of Japan. Biden hailed McCall on Wednesday as “a friend of mine.”
The USW has worked for decades to influence mergers and acquisitions in an effort to preserve jobs, supporting companies it considers more worker-friendly. But members say this fight is different in a union threatened by the decline of the U.S. steel industry as a whole.
“I’ve worked at US Steel for 23 years and I’ve never felt nervous about my job until now,” said Don Furko, president of United Steelworkers Local 1557, which represents US employees. Steel in Clairton, Pennsylvania.
Nippon offered US Steel $55 per share in cash in December, months after the US company rejected a lower offer from US-based Cleveland-Cliffs. Shortly after, Nippon said it had no plans to close factories or lay off staff until the USW labor contract expired in 2026.
Furko said that, rather than appeasing steelworkers, Nippon’s comments had the opposite effect.
“It was just shocking,” he said. “If up front, before you even have negotiations or anything, you mention the possibility of layoffs or plant closures, we don’t want that deal to go through. It’s just a stupid thing to say.
Of the USW’s 1.2 million members, only about 11,000 work for US Steel. Their fear is that Japan will close the aging blast furnaces where most of them work. After years of closure, only five of them remain open.
Nippon remains one of the world’s largest blast furnace operators, but it has closed several of its own blast furnaces in Japan in recent years to cut costs and emissions, laying off thousands of workers in the process. Nippon originally proposed purchasing only US Steel’s electric arc furnace “mini-mills” in Arkansas, where workers are not represented by a union.
“US Steel says, ‘Oh, this will be good for your members because they’ll invest,'” McCall said in an interview. “But they won’t tell us where. If they want to invest in building another EAF in Arkansas, that doesn’t help our members.
USW leaders also criticized the Japanese group for not contacting the union before submitting its offer to the US Steel board, unlike other interested parties, including Cleveland-Cliffs, based in Ohio, and Esmark, Pennsylvania. Nippon said in a regulatory filing that it wanted to meet with the United Steelworkers Union before signing an agreement, but was prevented from doing so by US Steel’s legal advisers.
Nippon said in a statement: “From the outset, our goal has been clear: to protect and grow US Steel in the American market for the benefit of all its stakeholders through increased financial investments and the contribution of our cutting-edge technologies. . We look forward to working closely with US Steel to advance together as a “best steelmaker with world-leading capabilities.”
The fight for the century-old steelmaker’s future comes after decades of decline for U.S. Steel, once the world’s most valuable company. Its relationship with the union that represents half its workers has deteriorated over the past decade as the company expanded into Arkansas, where unions are rare, McCall said.
Employment in U.S. steel mills fell by more than half between 1990 and 2022, to just 83,200 jobs, according to the Department of Labor. Declining payrolls have left the union struggling for relevance and forced it to redefine itself by adding members in transportation, health care and education. But recruiting dues-paying members in new sectors is expensive and often takes years.
“Unions are very successful at organizing right now, but they often lose members faster than they add due to factory closures,” said Anne Lofaso, a professor who studies work at West Virginia University Law School.
Art Wheaton, director of social studies at Cornell’s School of Industrial and Labor Relations, added: “Everyone would agree that US Steel is declining, declining, declining, and workers would all benefit of significant investment, but there is a lot of political influence involved.
McCall officially endorsed Biden on behalf of the union last month, after the president came out against the Japan deal. McCall credited the Biden administration’s pro-industry economic policies with creating greater job and retirement security for its members.
However, rank-and-file steelworkers are not necessarily in sync with their union. In Furko’s local, support for Trump is “overwhelming,” he said.
“They just think Donald Trump has our best interests at heart more,” Furko said, adding that the former president’s tariffs on Chinese imports “helped us in the beginning.”
There is also another factor behind the USW’s resistance to Japan’s proposed expansion into the United States: what experts call a years-long Cleveland-Cliffs charm offensive.
In an industry where relations between worker unions and employers are notoriously strained, Cleveland-Cliffs has touted the union jobs it has preserved after its past acquisitions. Last August, the United Steelworkers Union said it would not support any other bidder for US Steel, praising the Ohio-based company as “an outstanding employer.”
“We have a very, very strong partnership with the USW,” Lourenço Goncalves, chief executive of Cleveland-Cliffs, told CNBC last month, predicting that Japan would never reach a deal with the union.
When asked by the Financial Times if Japan could do anything to convince its United Steelworkers members, McCall’s answer was firm: “No.”