Trump: ``Absolutely block'' What will happen to Nippon Steel's huge acquisition plan?February 13, 15:20
``I can't think of any negative implications for the United States,''
Eiji Hashimoto, president of Nippon Steel, said at a press conference in January regarding the company's plan to acquire US Steel, one of America's leading steel manufacturers.
However, following fierce opposition from labor unions, former President Trump subsequently announced that he would not approve the takeover, saying, ``I would immediately block it.'' This is an unusual development in that even President Biden is said to be backing the union's stance against the takeover.
As the investigation progressed, it became clear that the fate of the takeover was complicated by the intentions of both camps to gain support from workers in this fall's presidential election.
(Washington bureau reporter Takuya Odajima)
Why are you against the acquisition plan? What employees really think
Nippon Steel announced its acquisition agreement with US Steel in December 2023.
The acquisition price is expected to be approximately 2 trillion yen, and if you simply add up the crude steel production of both companies, it will be the third largest in the world, so it has attracted attention as a major reorganization of the steel industry in Japan and the United States.
However, this acquisition plan met with opposition from the beginning in the United States.
To find out why, I headed to eastern Pennsylvania, where US Steel's headquarters are located.
``I'm hurt that such a huge, iconic company that everyone knows is being acquired.''
When I asked Michael Evanovich, who has worked at the company for over 20 years, how he felt about the acquisition, he frankly replied, ``I'm shocked.'' I'm here.
There are circumstances behind this kind of emotional upheaval among employees.
Founded in 1901, US Steel is a symbol of American manufacturing with a history of over 120 years.
Pittsburgh, home to some of the oldest factories still in operation, is also known as the "Steel City."
The smoke rising from the factory is an integral part of the lives of Pittsburghers, and many people find it emotionally unacceptable that a company they are proud of should go into the hands of a foreign company.
Evanovich says pride is not the only reason for her resistance.
The company has a comprehensive pension system that subsidizes retirees' medical expenses, and the current contract states that this system will continue until 2026.
However, it is unclear whether this will continue even after the acquisition, and other employees expressed concerns, saying, ``They say they will honor the contract, but what happens after that is not discussed.''
Labor unions push back against Trump: ``Stop it immediately''
The deal has also been criticized by the United Steelworkers union, which represents about 11,000 U.S. Steel employees.
"To say we are disappointed is an understatement. U.S. Steel has chosen to put worker concerns aside and be acquired by a foreign company," the company said in a statement after the deal was announced. did.
This is due to concerns about the impact that the acquisition of the steel industry by foreign companies will have on security and employment.
Former President Trump, who has an overwhelming lead in the Republican nomination race for this November's presidential election, responded to this.
He said in late January that he would not approve the takeover if he became president again, saying, "This is terrible. I would stop it immediately. Absolutely."
The statement was made to reporters immediately after a meeting with a labor union made up of truck drivers, and is believed to be an attempt to demonstrate that he values the voices of workers.
Why does former President Trump go out of his way to show a pro-worker stance regarding this acquisition agreement?
The reason for this is that Pennsylvania, where U.S. Steel is headquartered, is a battleground state where Democratic and Republican support is at odds.
Pennsylvania was one of the centers of the steel and coal industries, which were once major industries, and is part of the region known as the "Steel Belt," which supported tremendous economic growth after World War II.
However, it gradually declined amid international competition.
The rusty industrial zone, which has come to be known as the "Rust Belt," has become a source of frustration among workers.
Mr. Trump received strong support from these workers.
In the 2016 presidential election, he won support from workers by promising to ``bring back lost jobs'' and won Pennsylvania.
Union's position: Is President Biden "supporting" it?
Meanwhile, in the 2020 election, Biden won back Pennsylvania.
In the past two presidential elections, the candidate who won in this state became president, making it one of the important states that determines the election results.
The United Steelworkers union is an organization that can be expected to attract votes in elections, and cannot be ignored by both the Democratic and Republican parties.
Regarding Nippon Steel's agreement to acquire US Steel, President Biden was cautious, saying, ``Steel is an important industry for national security.Even a close ally deserves to be scrutinized under the law.'' It emphasizes the attitude of consideration.
On February 2, the United Steelworkers released a statement saying, "We have received personal assurance from President Biden that he has our back. He will always be a friend of American workers and unions." .
The current president was seen as supporting the union's stance against the takeover.
Expert: “There are roots of trouble in Japan-U.S. relations”
What will happen to the huge acquisition plan?
Nippon Steel has indicated that it aims to complete the acquisition by September, following the general meeting of US Steel's shareholders in March.
At a financial results conference in February, Vice President Hiroshi Mori said, ``Political concerns will grow as November approaches, so we need to find common ground with the labor union as soon as possible and put a stop to political movements.'' is important,'' he said, emphasizing the company's commitment to proceeding with the acquisition as planned.
Meanwhile, the Biden administration plans to investigate the impact of the acquisition on America's national security through the government's Committee on Foreign Investment.
The Committee on Foreign Investment is chaired by Treasury Secretary Yellen and includes the secretaries of the Departments of Justice and Homeland Security, among others.
Some experts are skeptical about whether there will actually be any impact on national security.
"Japan is one of our closest allies based on common interests and common values, and Japanese companies are He pointed out that there is no security risk in investing in American companies, and added, ``If the acquisition is not approved, it will leave roots of trouble in the Japan-U.S. relationship.''
However, in the run-up to the presidential election, American media outlets have reported that the results of this review may be pushed back to 2025, pointing out the possibility that it will take a long time.
What will happen to the headwind acquisition plan?
In this interview, when I asked one US Steel employee what he hoped President Biden would do, he replied, ``I hope he sticks to his beliefs (valuing labor unions) and stops the takeover.'' I did.
However, he also confessed, ``I don't know if that's the right answer. I don't know what will happen if the acquisition is cancelled.''
For steel manufacturers, competition with Chinese manufacturers, which have an overwhelming presence in the global market, and investment in decarbonization are urgent issues.
Even the employees who are protesting are concerned about the future of U.S. Steel's management if the acquisition is not approved.
For Nippon Steel, the United States, which is extremely strong among developed countries, is an essential piece of its business strategy with an eye on the global market, as demand for steel is expected to increase and electric vehicles (EVs) are expected to spread.
The situation will continue to attract attention, with the decision of the US government and speculation regarding the election involved, as to whether the big acquisition will be realized.
(Broadcast on “Good Morning Japan” on February 1st)
Washington bureau reporter
Takuya Odajima Joined the
bureau in 2003
After working in the Kofu Bureau, Economic Affairs Department, Toyama Bureau, etc., he currently belongs to the Bureau.