USW files grievances over proposed sale

Union opposes Nippon Steel deal with U.S. Steel

The United Steelworkers union and five locals representing employees at U.S. Steel Corp. have informed their members that grievances have been filed against the Pittsburgh-based company over its plans to sell itself to Nippon Steel Corp.

The proposed acquisition, announced last month and valued at nearly $15 billion, was “sprung on the union,” the USW wrote last month. It had strongly and exclusively backed a different bid, from rival steelmaker Cleveland-Cliffs Inc., which initially offered $7.3 billion for U.S. Steel in July. U.S.

Steel’s rejection of that offer launched what it called a “strategic review process” during which the company said it received credible bids from other companies as well.

On Thursday, the union sent a letter to U.S. Steel CEO David Burritt specifying the provisions of the basic labor agreement the union believes have been violated during this review process and asking to begin dispute resolution.

“These violations include refusing to provide the union with any information about the sale process that its Board of Directors started in August, including simple things such as important deadlines or timetables,” the union wrote in a note to members. “[U.S. Steel] also failed to provide the USW with the information about the bids it received, to which we are also entitled under our [labor agreements], even as it entered into a contract to merge with Nippon’s Houston -based holding company. It did all this while ignoring our attempts to negotiate a reasonable confidentiality agreement.”

In a statement Saturday, U.S. Steel said it has “complied with its obligations under the basic labor agreements, and we expect to work through and favorably resolve any grievances filed by the USW as quickly as possible.”

The union is focusing on two portions of its basic labor agreement, which was ratified in December 2022 and expires in September 2026. One is the right to bid, which gives the union the ability to organize its own transaction or assign that right to another entity, as the USW has done with Ohio-based Cliffs.

The labor agreement stipulates that U.S. Steel “shall promptly notify the USW of the schedule and/or timetable for consideration by the company of any possible transaction” and that it would give the union 45 days to make an offer. It also says U.S. Steel has to make available to the USW “any information provided to other bidders.” But, if the union has chosen to assign its right to bid to a U.S. Steel competitor, “then the company may reasonably manage the provision of confidential information” to that rival.

In its letter to Mr. Burritt, the USW has requested to see all of the information considered by the company’s board of directors when it rejected Cliffs’ offer and pursued a deal with Nippon.

The union has also zeroed in on the part of its labor agreement titled successorship, which is meant to ensure that whoever takes over U.S. Steel is bound by the labor agreements negotiated between the USW and the company.

As soon as Nippon’s offer was accepted by U.S. Steel’s board, the international union, which presents 11,000 U.S. Steel employees, came out against it, arguing that it hadn’t been consulted or reassured that its collective bargaining agreements would be honored.

In joint messaging, U.S. Steel and Japan-based Nippon have said there would be “no changes to collective bargaining agreements,” and that “represented members will continue receiving their paychecks, profit sharing and benefits from U.S. Steel,” which would remain the company’s name after it’s acquired.

But in a letter to union members Friday, the USW wrote: “We know talk is cheap, especially coming from greedy corporations.”

“That is why we negotiated successorship rights into our [basic labor agreement] to protect our contracts and our members in precisely this situation. These rights are enforceable guarantees that a company seeking to buy our facilities cannot shirk its responsibilities to workers and retirees,” the union wrote.

The labor agreement says U.S. Steel can’t sell itself unless, among other things, the buyer has “provided the union with reasonable assurances that it has both the willingness and financial wherewithal to honor the commitments contained in all of the agreements between the Company and the Union.”

Nippon and U.S. Steel have said as much. A fact sheet on U.S. Steel’s website says the Japanese company “has the financial wherewithal and desire to honor all existing agreements with the USW.”

But the union has said it needs proof of that.

“Simply saying Nippon Steel North America will accept our labor agreements does not satisfy the conditions of the Basic Labor Agreement,” the union wrote after its Dec. 29 meeting with Hiroshi Ono, president of Nippon Steel North America at USW’s headquarters Downtown.

For example, the labor agreement provides for profit sharing as an employee benefit. But union officials said it would be difficult to ensure that’s being done properly if Nippon folds U.S. Steel’s financials into its consolidated statements. The USW wrote that’s what Nippon’s representatives said would happen after the acquisition.

“The USW is prepared to continue this grievance process all the way to its conclusion as we hold management accountable for trying to cash in by selling out American Steelworkers and its shocking disregard for our contracts and its dedicated workforce,” the union wrote.

This could be the latest snag in U.S. Steel’s effort to close the deal by the second or third quarter. Already, the deal is being scrutinized by the Committee on Foreign Investment in the U.S., an interagency panel led by the Treasury Department, which has the power to approve, block or amend the deal on national security grounds, or send it to President Joe Biden for a decision. Some analysts say the process could drag on until next year.

The USW has also emphasized the national security and domestic supply chain angles of the deal in previous communications, wondering how Japanese ownership might impact the company’s long-held support for federal anti-dumping orders against Japanese steel imports.

The announced sale has stirred the attention of politicians and pundits, some arguing it has concerning national security implications and others worried for the fate of American workers.

U.S. Steel has tried to counterprogram some of the talk. It began running television commercials about an “American-made future” that say that “new ownership helps our jobs stay in the countrywe’re named after.”

In the past two weeks, it displayed quotes from politicians favoring the deal on screens in its facilities.

U.S. Steel has about 3,700 employees in southwestern Pennsylvania, at the company’s Mon Valley Works facilities and at its corporate headquarters Downtown. Worldwide, it has more than 22,000 workers.