New marketing blitz pressures government to OK U.S. Steel sale

The company is hoping to sway public opinion in favor of the purchase.

By JACK TROY
Trib Total Media

U.S. Steel is banking on public pressure to push through a $14.9 billion acquisition by Nippon Steel as lawmakers and regulators balk at putting the domestic icon in foreign hands.

An advertising campaign launched this year touts promises by Japan’s largest steelmaker to preserve jobs, upgrade plants and sustain American steelmaking, which plays a relatively minor part in the global market but carries major symbolic weight in some parts of the country, including the Pittsburgh area.

“New ownership helps our jobs stay in the country we’re named after,” a narrator assures viewers in one television commercial.

The sale would drive the industry “toward decarbonization and a sustainable world,” the company claims on bestdealforamericansteel. com.

U.S. Steel has sent mailers to homes in Western Pennsylvania with a more direct appeal: “Tell your elected officials to support the U.S. Steel and Nippon Steel partnership.”

It’s common for companies in takeover talks to notify customers or, for major sales, lobby members of Congress, according to mergers and acquisitions consultant Jennifer Fondrevay.

But this is the first time Fondrevay has seen a company talk directly to voters in this way, which she said is a product of the political climate.

“If you go back and see what the mergers and acquisitions deal ratio is, it has slowed with the current administration,” Fondrevay said. “I think they made it almost a platform, which is why (U.S. Steel) may be going to extreme lengths.”

During President Joe Biden’s first two years in office, companies abandoned or restructured deals that received heightened attention from regulators at higher rates than during the Donald Trump administration or Barack Obama’s second term, federal data shows.

U.S. Steel says it’s simply trying to educate people on the sale, which has attracted scrutiny from the Department of Justice as well as a bipartisan collection of lawmakers, from progressive Democrat Sen. Sherrod Brown to the Republican presidential candidate’s running mate, Sen. J.D. Vance.

“We believe it is important to share the facts and benefits of the transaction in a transparent and accessible manner with many stakeholders who have an interest in the outcome, which includes employees, customers, communities and investors,” U.S. Steel spokesperson Amanda Malkowski said. “We have received questions, and we want to provide answers.”

Some of the loudest calls to nix the deal have come from Pennsylvania politicians.

In June, Sens. John Fetterman and Bob Casey, both Democrats, joined Brown in a letter that urged the administration to block the proposed sale, citing threats to trade enforcement.

Both senators reiterated their opposition in statements to TribLive and insisted that steel continue to be made in the Mon Valley.

Nippon Steel has said it will honor U.S. Steel’s contract with the United Steelworkers, which expires Sept. 1, 2026, and has promised no plant closures or layoffs during that time. It also committed $1.4 billion to improving union-run plants, which may include Mon Valley Works.

The USW, for its part, has filed grievances against U.S. Steel for announcing the merger without giving workers advance notice. It also has taken shots at current and possible future management for threatening the stability of American steelmaking.

In messages sent to its members, the union has stressed that promises of job security and upgrades depend on economic conditions — a fact acknowledged by Nippon Steel.

Takahiro Mori, executive vice president of Nippon Steel, said in a letter to USW leadership the company “would welcome the opportunity to work with you to define parameters around the exceptions … and collaborate with the USW to avoid an adverse outcome as best as possible.”

Rep. Summer Lee, D-Swissvale, emphasized not just the potential impact on workers, but any changes to pollution control practices that might come with new ownership at the Mon Valley Works. She said her stance has not been impacted by the flurry of advertisements.

“U.S. Steel owes its workers and this community much more than what has been shown so far,” Lee said. “This recent marketing push by U.S. Steel does little to alleviate our concerns.”

Rep. Chris Deluzio, who did not respond to a request for comment, told TribLive in April that national security concerns are front of mind for him.

“I worry about a future where we see domestic steel capacity and ownership of that industry continue to shrink when it’s so central to defense infrastructure,” Deluzio said.

Ultimately, it’s not up to Congress, according to Kristin Kanthak, a political science professor at the University of Pittsburgh, where faculty are represented by the USW. Only Biden or the Department of Justice could block the sale.

But pressure from the congressional Committee on Foreign Investment in the United States could impact whether Biden reaches for the Defense Production Act, she said.

“Recommendations like that provide a lot of political cover,” Kanthak said. “Then you can argue, ‘The experts are saying this is what we should do.’ ” After dropping his reelection bid Sunday, it’s unclear how sensitive to external input Biden will be when deciding whether to block the sale. He came out against foreign control of U.S. Steel while campaigning but failed to offer more specifics.

Vice President Kamala Harris has yet to detail her position on the transaction.

Trump has been more pointed in his opposition but hasn’t detailed how he would block the deal, either. Nippon Steel hired Trump’s former State Department secretary, Mike Pompeo, to help clinch the deal earlier this month.