U.S. Steel has warned that it may close plants and relocate its Pittsburgh headquarters if its proposed sale to Japanese firm Nippon Steel is blocked by the Biden administration.
Demonstration in Pittsburgh
The potential $14.9 billion deal is under scrutiny after concerns arose that it could pose a risk to national security, according to El Economista.
CEO David Burritt expressed the company's frustration, emphasizing that a ban on the sale would jeopardize "thousands of good union jobs" and have a negative impact on the communities where the plants are located. In support of the sale, U.S. Steel workers recently held a demonstration at the company’s Pittsburgh offices.
In an interview with The Wall Street Journal, Burritt shared that U.S. Steel has plans to invest $3 billion in upgrading outdated plants to remain competitive. However, he admitted, "We wouldn’t make these investments if the deal falls through. We just don’t have the funds."
A Drop in Stocks
Burritt's comments followed a significant drop in U.S. Steel’s stock, which fell more than 21% after the White House’s intention to block the sale was reported.
The potential closure of U.S. Steel comes after political figures like Vice President Kamala Harris expressed opposition to the sale, insisting that the iconic company must remain in American hands. Former President Donald Trump has also called for the deal to be stopped.
U.S. Steel, once a dominant force in the American economy, holds a unique place in U.S. industrial history.
The company was the first to surpass $1 billion in market capitalization in the early 20th century, and its influence was immortalized in The Godfather Part II, where the character Hyman Roth famously says, "Michael, we’re bigger than U.S. Steel."
