Nippon Steel Corp. has increased its capital commitment by over $1 billion to invest in U.S. Steel's plants, despite facing opposition from political and labor groups regarding its acquisition of the American steelmaker. The Japanese company's additional $1.3 billion pledge to upgrade facilities in Pennsylvania and Indiana supplements its initial commitment of $1.4 billion.
The upgrade plans include investing at least $1 billion in enhancing the hot strip mill at the Irvin Plant in Pennsylvania's Mon Valley Works, along with other facilities in the region. Additionally, around $300 million will be allocated to improve a blast furnace at Gary Works in Gary, Indiana.
U.S. Steel's CEO, David Burritt, praised Nippon Steel's commitment as a step towards completing the transaction and expanding U.S. Steel. However, the United Steelworkers union has criticized the move as mere 'lip service' and remains opposed to the deal.
The sale comes amidst a resurgence of political support for revitalizing America's manufacturing sector, with Pennsylvania playing a pivotal role in the upcoming presidential election. The ongoing imposition of protective U.S. tariffs has also contributed to the revival of the domestic steel industry.
Nippon Steel emphasized that these investments will not only prolong the life of the facilities but also enhance productivity, making the American steelmaking industry more competitive. Despite the opposition, Nippon Steel expects the transaction to be finalized in the latter half of 2024.
The United Steelworkers have raised concerns about the deal, particularly regarding labor agreements and the impact on retirees and communities. The union is adamant about keeping U.S. Steel under American ownership and has filed a grievance against the acquisition.
Political figures from both parties, including former President Donald Trump and Democratic nominee Vice President Kamala Harris, have expressed reservations about the deal. The Department of Justice is reviewing the acquisition for antitrust compliance, while the Committee on Foreign Investment in the United States will assess it for national security implications.
