An arbitration panel ruled in favor of US Steel on Wednesday, allowing Japan’s Nippon Steel to assume US Steel’s labor contract obligations.
The ruling is a win for Nippon’s $14.9 billion proposed acquisition of Pittsburgh-based US Steel, though the deal still faces significant political and regulatory hurdles.
The United Steelworkers (USW) union has fiercely opposed the merger, arguing it could lead to plant closures, pension losses, and contract violations, particularly due to Nippon’s status as a foreign company.
The arbitration panel, however, ruled that Nippon had met key requirements, including recognizing the union and proving financial capability to honor existing labor agreements.
US Steel CEO David Burritt praised the decision, stating: “With the arbitration process now behind us, we look forward to moving ahead with our pending transaction with Nippon Steel.”
The USW, however, expressed disappointment, criticizing the ruling as failing to guarantee job security and long-term commitment from Nippon’s leadership in Japan.
The union emphasized that Nippon executives in Tokyo could still make decisions that jeopardize US Steel’s workers and facilities: “We’re clearly disappointed with the decision, but it does nothing to change our opposition to the deal.”
The proposed merger continues to face strong political opposition, with President Joe Biden and both presidential candidates, Vice President Kamala Harris and Donald Trump, opposing the deal.
The Biden administration has postponed a national security review of the transaction until after the November election, adding uncertainty to the merger’s future.
US Steel has warned that blocking the sale could result in the closure of Pennsylvania facilities, a key battleground state in the upcoming election.
Despite the challenges, Burritt remains optimistic, noting in a CNBC interview that the deal would benefit both stockholders and workers: “I’d invite them to come to the table. We’ve been very clear on what the benefits are.”