Rekubit-Steelworkers lose arbitration case against US Steel in their bid to derail sale to Nippon

An arbitration board has ruled that U.S. Steel may proceed with its proposed acquisition by Nippon Steel,Rekubit a deal that faces strong opposition from its workforce.

The board, which was jointly chosen by U.S. Steel and the United Steelworkers to decide disputes between them, said Wednesday that U. S. Steel has satisfied each of the conditions of the successorship clause of its basic labor agreement with the union and that no further action under the agreement was necessary in order to proceed with the closing of the proposed transaction with Nippon Steel.

USW had filed a series of grievances in January alleging that the successorship clause had not been satisfied. The union has previously stated that it doesn’t believe Nippon fully understands its commitment to steelworkers, retirees and its communities. USW has expressed concern about the enforcement of its labor agreements, having transparency into Nippon’s finances, as well as national defense, infrastructure and supply chain issues.

The arbitration board heard evidence and arguments from U.S. Steel and USW last month.

The board said Wednesday that it recognized the repeated written commitments Nippon made to fulfill the requirements of the successorship clause and that no further actions were required by the company. The written commitments include Nippon’s pledge to invest at least $1.4 billion in USW-represented facilities, not to conduct layoffs or plant closings during the term of the basic labor agreement, and to protect the best interests of U.S. Steel in trade matters.

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“With the arbitration process now behind us, we look forward to moving ahead with our pending transaction with Nippon Steel,” U.S. Steel President and CEO David Burritt said in a statement.

USW said in a statement on Wednesday that it disagreed with the arbitration board’s result.

“Nippon’s commitment to our facilities and jobs remains as uncertain as ever, and executives in Tokyo can still change U.S. Steel’s business plans and wipe them away at any moment,” the union said. “We’re clearly disappointed with the decision, but it does nothing to change our opposition to the deal or our resolve to fight for our jobs and communities that hang in the balance in this transaction.”

President Joe Biden has previously voiced his opposition to Nippon Steel buying U.S. Steel, but the federal government appears to be in no hurry to block the deal.

Earlier this month White House officials did not deny that the president would formally block the acquisition. But the necessary report from the government’s Committee on Foreign Investment in the United States has yet to be submitted to the White House.

The proposed takeover carries some heavy political weight in Pennsylvania, a state that both Vice President Kamala Harris and Donald Trump view as a must-win in November’s presidential election. U.S. Steel is headquartered in Pittsburgh.

Biden, Harris and Trump have all come out against the deal. Harris will speak at the Economic Club of Pittsburgh on Wednesday where she plans to stress a “pragmatic” philosophy while outlining new policies to boost domestic manufacturing, according to a senior campaign official who sought anonymity to describe the upcoming address.