IS U.S. STEEL BETTER OFF BEING OWNED BY NIPPON STEEL OR CLEVELAND-CLIFFS? YOU DECIDE!

TIME IS OF THE ESSENCE CONCERNING ACQUISITION OF U.S. STEEL BY NIPPON STEEL

AS THIS PROVERBIAL CLOCK TICKS FORWARD WHAT WILL BE THE END RESULT?

Perhaps we should assess who and how this decision about who is the actual acquirer of U.S. Steel impacts the most by reading the following:

United States – The USA is in dire need to rebuild the middle class.? Here the USA is being provided a rare opportunity to do this with the assistance of one of this Countries closest ally in NATO, Japan.? Now Nippon could have chosen to look the other way and not even expressed an interest in this struggling, iconic Steel Company, but instead, because in large part, due to our national interests in seeing China and Russia continuing to flood the world market with cheaply made, unreliable steel, they threw their hat in the ring and offered up an offer that was far superior to any other offers submitted by any other competitors.? They agreed to recognize the USW as the bargaining representative and assume all agreements that exist between U.S. Steel and the USW and have provided evidence that they have the wherewithal to meet the obligations that fall under these Agreements.? In other words, Nippon Steel has met its burden from a contractual standpoint.? The gains for the USA is that not only will U.S. Steel continue to exist, but with several billions of dollars in capital investments and guarantees of continuing operation in these facilities that they invest in.? Therefore this provides “middle class income jobs” to thousands of direct U.S. Steel employees as well as hundreds of thousands of “indirect jobs” that will be impacted either positively or negatively based on what the ultimate outcome is.? One thing that we know for certain, is that due to the Infrastructure legislation that Biden got passed through Congress in his first couple of years in office, this Nation alone, will need all the steel that it can produce domestically as well as imported steel to meet the needs of fixing our bridges, roads, sewer systems, subways, airports, rail, ….? The list can just go on and on with what and how much steel is going to be relied on in just the USA, let alone around the globe.? So can this help the United States??? This is what we call a “NO BRAINER” for most, but for some, they still don’t get it and it’s really because they just don’t want to get it!?

Japan – Well, simply the acknowledgement that the USA doesn’t believe there’s some nefarious scheme being cooked up here by this Japanese owned Company, this would significantly either improve or set back the relationship between the United States and Japan.? Many seem hell-bent on not forgetting Pearl Harbor and the war we fought against Japan but in doing so, they are bringing as much damage or more so than what the results of this war did.? This Writer isn’t taking into effect the lost lives and demeaning their significance but instead is attempting to propose that here is Japan and a major Japanese Steel Company stepping to assist the United States by becoming a presences in our domestic Steel industry with the purchase of U.S. Steel, promising billions of dollars of investments, giving guarantees of employment, adding to the necessary volume of steel it will take just in the USA to meet its needs with its infrastructure legislation, and if necessary, to also assist any shortages by sending steel over to the USA to have manufactured if needed.? This will additionally show the rest of the world that if you are an ally of the United States, then they will work alongside of any Country that they are allied with in their efforts to gain and maintain a foot hole up on our adversaries.? This will move Nippon Steel up on the list of steel producers from the 4th largest to the 2nd largest steel producer and will have operations in other countries that are not adversaries to the United States.? ?

President Biden - whether or not he will block the sale of U.S. Steel to Nippon Steel – In all reality, Biden has nothing whatsoever to lose as he leaves the office of President on January 20, 2025.? He has been waiting on this CFIUS Report and clearance from his DOJ (Anti-Trust Division) on this acquisition to either help support a potential decline on his approval of this deal, thus blocking it.? That being stated however is intended to suggest what Biden has to gain if he were to instead, change his position on this matter, and support the purchase of U.S. Steel by Nippon Steel.? What is that one might ask?? This Writer can think of many but will only name a few in order to move on.? His gains would be the reassurance to Japan that they are in fact “that closest ally” of the USA by allowing this deal to go through showing that there really are no fears of any nefarious intents by Nippon Steel buying this iconic U.S. Steel Company and returning it to as close as history will most likely allow it to be, into the competitive steel producer that it once was, pouring billions of dollars into the existing structures and antiquated equipment with modern technology that will allow U.S. Steel the ability to assure customers that they can and will deliver the best “world class” steel they can purchase on the market and regardless whether it’s owned and/or operated either domestically or foreign, the product structure and integrity of doing business with U.S. Steel will once again provide not just the United States with all the steel they need, but globally as well.

This can become one of the greatest pieces of legacy for President Joe Biden by seeing that this deal does in fact go through.

President-elect Trump – Trump has already committed to vetoing this deal when he comes into office.? This is one of the reasons why this current Administration, Biden himself, and the two aforementioned Companies need to be prepared to advance this matter as expeditiously as possible to prevent this from happening.? Why?? Because Trump doesn’t know the first thing about the steel industry.? Trump is a real estate person and manufacturing of anything is not his strong suit.? Instead, this Writer would suggest that it’s one of his weakest points.? Trump may claim that everything should be made in America, but if one looks closely as some of the products he has sold, they haven’t been produced in America.? If one were to look at some of the employee(s) that has worked for him, they haven’t been American citizens.? So as always, when Trump talks, he’s not always giving the facts, but instead, “the alternative facts”.? I guess one might say they are “fake facts”!? Trump may act like he cares about these steel mills and these thousands of jobs at risk, but have you seen how many of his own companies that he’s bankrupted and screwed the workers in the process?? Yes, that right, not that great of a business man either.

U.S. Steel – This Iconic Company that back in the late 1800’s was considered the most valuable Company in the world.? Just let that sink in for a minute.? Worth nearly $1 billion. ?Nowadays that number is minuet compared to the value of companies today but when considering this size, the value, the number of employees, the presence its mills had, the back-bone of middle class jobs for workers, families, communities, etc…

In all reality, U.S. Steel is struggling and in the scheme of the big picture, won’t be around much longer absent the right Buyer coming in and making some significant capital investments, conversion of some of their furnaces to utilize nitrogen instead of coal to melt steel, updating old antiquated equipment that will enable the company to actually have equipment that can compete with these other company’s world-wide that have newer, cleaner, and faster capabilities to produce steel.? This deal with Nippon buying them provides a pathway for all of this to happen.? They will be able to get contracts with buyers that they haven’t been able to secure in the past.? Their delivery integrity (which goes a long way in the world of repeat orders) will improve immensely; they will improve their standing with current vendors and add additional vendors.? Their employee(s) will work in a cleaner, more modern environment that will be a safer place to work.? Their employee(s) moral will significantly improve which will improve attendance, decrease absenteeism and tardiness because they will see what this new Company wants to do to make U.S. Steel a world class operation and they have demonstrated that they want to be part of this.

Cleveland-Cliffs – This is a company that simply cannot and will not let go of this idea of being the successful bidder and owning U.S. Steel.? They envision that things will remain the same even though there will be many issues that the Department of Justice (Anti-Trust Division) won’t allow to go unchecked and therefore, Cliffs will have to sell off and/or shut down certain overlapping, duplicity of production work, particularly work in the auto industry which is a large customer for Cliffs.? For some odd reason, Cliffs seems to believe that they won’t face this obstacle and are immune from it, yet in all reality, it will eventually happen should they pull some rabbit out of a hat.?

CEO Lourenco Goncalves – For ten (10) years now, this guy has been at the helm of Cleveland-Cliffs.? He acts as if everything he touches turns to gold, but instead he’s had his fair share of failures in the steel industry.? Not so much that everyone could see it but for those who follow the steel industry and are keen to what plants he has purchased, sold, shut down, etc., he’s certainly no giant in the Industry.? At least only in his own mind.? He reminds this Writer of a man out in the ocean, in a storm, without a life preserver, flailing his arms about as he appears to be drowning but he just won’t go under.? At least not yet.? He has claimed that he has no interest in acquiring U.S. Steel then he begins buying other companies.? He recently bought Stelco.? He purchased AK Steel only to shut down some of their operations, bulldoze the land and publicly state that it will set desolate to avoid other competitors from rebuilding if the property were sold as they sat on the river with river access, have rail running by the property so they have rail access, etc.? This guy is about as much fluff as I’ve ever dealt with in the field of egotistical CEO’s of Company’s.?

Ron Bloom – BOD member of Cliffs – Ron Bloom went to work for the USW (United Steelworkers Union) back in 1996 as a “special assistant” to the International President, Leo Gerard.? One must ask, why would a very wealthy individual like Bloom want to work for a “labor union”.? Here’s how it was described to me by a member of the USW Executive Board in the early 2,000’s.? “It’s a game to him, like playing chess with the chess pieces being people’s lives”.? Now don’t get me wrong, Bloom is a very smart individual.? The problem is, he knows it.? But in this Writer’s experience in working alongside of Bloom with the USW for a few years it became more evident that what I had been told was in all reality the truth.? One of Bloom’s habits was taking a rubber band and contorting it with the fingers on one hand and I would sit and wonder whose lives are being altered in the mind of the fingers on the hand of the twisted rubber band.? Then I began wondering if maybe it was a sign of a “twisted mind”.? There are so many stories that I could share about Bloom but I think the most significant and pertinent for this Article is to try and help people understand how and why Bloom is where he is today.? After working for the USW until 2008-2009, Bloom went on to work for the Obama Administrative as his manufacturing Czar and worked on saving the auto industry in this Country.? He guided them through what he had done in the steel industry for the USW by getting two (2) out of the three (3) filed chapter 11 bankruptcy, dump their legacy costs such as their Pension Plans and their Retiree Health Insurance and renegotiating their Labor Agreements with the UAW and taking concessions.? The only one (1) of the “big three” was Ford as it would not file bankruptcy but did, as did the other two (2) take tax payer dollars to bail them out but to this Writers knowledge, it was all paid back when the auto industry became more stable.? Bloom moved on in the Administration to draft manufacturing policies and work for the Treasury Department along with Janet Yellen so yes, there are some political ties involved here.? Just about a year ago this month, Bloom was named as a second “Board Member” to Cleveland-Cliffs Board of Directors.? So now we have a prior USW employee, prior Wall Street Financier”, prior Government employee, now sitting on Cliffs BOD.? Early on everyone would ask me, why does the USW have this seemingly inseparable bond with Cleveland-Cliffs and only back them in the acquisition of U.S. Steel?? This is one of the primary reasons.? They want to have a bigger say at what goes on inside the “Board Room” at U.S. Steel and that isn’t likely to happen with Nippon Steel as it is with Cliffs.? Therefore, Bloom has been lobbying his political ties, to push against this deal with Nippon, the USW has been doing the same and it’s all about “POWER”.

Workers at U.S. Steel – Why should anyone worry about the workers at this Company we’ve been discussing.? I mean after all, why should they have any say in who buys them or what happens to them?? They’re just workers, right?? WRONG!!!!!? These are the workers and descendants of workers that have made U.S. Steel what it was and what it can be if only given the chance under the right leadership.? Maybe CEO Burritt hasn’t always made the right choices and maybe he’s not always done what’s been in the best interest of the Company, but McCall, USW International President has truly mischaracterized Burritt on a couple of issues that this Writer believes needs clarity on.? McCall seems intent on continually criticizing Burritt about lying to the USW about its commitment to $1billion during the last two (2) Bargaining Agreements.? What McCall so conveniently leaves out is the provision that gives the Board of Directors to utilize their discretion in this capital investment if they believe it to be in their best interest.? Therefore my unsolicited advice to McCall and the USW is that if you want the guarantee of Capital Investment in a particular facility, negotiate the “iron-clad provision” that has no exceptions!

Secondly, McCall seems really bothered by the fact that in the event that this deal goes through with Nippon acquiring U.S. Steel, Burritt will be paid seventy some million dollars ($70,000,000.00)? Yes, McCall that is a lot of money but don’t play like you’ve never seen this happen before and that you are surprised that this would occur.? They are called “Corporate Umbrella’s” and they’ve been around longer than you or I so you should just get over it.? Lastly, McCall if you want a seat a Nippon Board of Directors, do what you did at Cleveland-Cliffs and bargain for it.? No one has simply ever given labor a seat at that table and their not about to start doing it now.? You bargained it at Cliffs, so do the same thing with Nippon Steel.

Politicians that have constituents that work in these various facilities across the USA –

These politicians have done so much “saber-rattling” it has become more sickening over time.? They don’t care about these workers either.? They care about their votes and their own careers and if these workers at U.S. Steel haven’t figured that out by now, then maybe you don’t deserve what Nippon Steel has offered to do if they are the successful bidders and actually acquire U.S. Steel.? They claim that they’ll be your voice in the capitol of our Nation but when does “YOUR” voice ever get heard?? It’s all about them catering to the “have-mores” and not the “have-nots” and it shouldn’t be that hard to figure out which of these two categories the workers fall into.? Wake up workers and keep fighting for what YOU want instead of what the USW is saying you want.? They aren’t your voice in this and they have demonstrated that from day one when they jumped on Cliffs bandwagon and haven’t let go of it since.? They tell you that if you join their union it will give you a “voice in the workplace”.? How’s that turned out for you in this matter because they’re not representing your interests here and you should be taking action against the USW for this lack of representation of your rights in this case.

Communities and the effect either a sale to Nippon or blocking such sale will have on indirect jobs – This Writer has seen so many manufacturing sites go by the way side because of “egotistical butt-heads” that think they have all the answers and the workers have none.? This has created ghost town communities that once thrived on seeing these mills operate and all the jobs they brought with them indirectly.? It’s not too late to see that the right thing happens here.? I have seen the swell of the “People’s Will Power” on this issue.? I will state for the record that it needed to happen sooner, but at least it’s happening now.? Nippon Steel, don’t let up.? Keep coming in and making promises you intend to keep.? Don’t commit to anything but what you will do and then do it and save these communities by there being so much pressure placed on the likes of Dave McCall, Joe Biden, and anyone else who tries to tell people how to think the way “they” want them to think instead of how they know themselves.? DON’T GIVE UP as there is one (1) more week to keep the pressure on and see this deal come to fruition.??

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This Article is published on December 17, 2024 by Tim Dean of Dean Labor Management Consulting, LLC