For decades, George DeBolt has given tours of former industrial sites around Pittsburgh. DeBolt’s grandfather worked for the union during the “Battle of Homestead,” where 16 people died during an armed confrontation between striking steelworkers and Pinkerton agents employed by Carnegie Steel, a predecessor to U.S. Steel. DeBolt’s father helped haul large pieces of metal for U.S. Steel as the owner of a trucking business.
DeBolt has carried on that steel-related lineage, albeit in a less hands-on way — he provides tours of significant sites related to the region’s industrial past.
“My claim to fame,” he said. “is that when he came to Pittsburgh, Prince Charles asked me to give him a tour of the industrial Valley here.”
So, Debolt had some opinions when U.S. Steel announced on Monday that it was being purchased by Nippon Steel Corporation — a larger Japanese steelmaker — for $14.9 billion.
Shareholders were happy about the announcement; U.S. Steel share prices surged at the news. But in and around Pittsburgh, the news elicited a range of negative reactions: from concern over national security implications voiced by elected representatives to outrage from the United Steelworkers union, which represents many U.S. Steel employees.
DeBolt said an important clue to why there was such a strong reaction was sitting about six miles down the Mon River from U.S. Steel’s Downtown corporate headquarters at the Waterfront, an open-air shopping complex that opened in 1999. The site was once home to the largest steel mill in the world, the Homestead Works, built by the Carnegie Steel Company, which eventually merged with the Federal Steel Company to and become U.S. Steel.
In a parking lot behind a Lowe’s hardware store, sits the 12,000 Pound Press — a 120-year-old steel press that was used to smash large steel ingots into sheets toward the end of the steelmaking process. Next to the press a sign reads, “Many World War Two battleships were outfitted with armor plate from this press, including the U.S.S. Missouri, the ship on which the Japanese signed the articles of surrender that ended the war.”
Many of the people who spoke to WESA for this article emphasized that steel made here helped win World Wars. It helped establish the U.S. as a global superpower. U.S. Steel, in a way, became synonymous with U.S. might. So, DeBolt suggests, people weren’t upset just because U.S. Steel was being sold. Rather, people were upset about it being sold to a foreign company — and a Japanese one at that.
“How about that for irony?” he said.
“This is just deja vu”
But for others, Monday’s announcement seemed to produce a sense that history was repeating itself.
American steel production peaked in the early 1970s. But, as the industry became more globalized and buyers began to buy cheaper steel elsewhere, production plummeted, bottoming out in the mid-80s. “Black Monday” in September 1977 — when Youngstown Sheet and Tube abruptly closed its Campbell Works plant in Youngstown, Ohio — was one of the first surprise announcements that upended the American steel industry — but it would be nowhere near the last.
The wave of mill closures during the next decade finally hit the Homestead Works in 1986. Mike Stout was the plant’s union representative and the last worker out before the plant shuttered for good.
“Tens of thousands of steelworkers lost their jobs illegally, were denied pensions, were denied severance pay,” Stout said. “And the result was the complete [and] utter destruction of the Monongahela Valley and towns like Homestead and McKeesport and Duquesne.”
Many of those towns and cities are now beset by poverty and health problems, some of which are a legacy of their close proximity to sources of industrial pollution. Stout spent years fighting U.S. Steel in court for millions of dollars in back pay and pensions for the plant’s workers. And for him, and many of the people who lived through that time, the sting of U.S. Steel’s announcement this week felt familiar.
“This is just deja vu. I mean, this is exactly what they did in the 1980s,” he said.
According to Stout, the company broke its promises to the steel workers repeatedly. The most recent betrayal, Stout said, was just a couple years ago — when U.S. Steel backpedaled on a promise to invest more than a billion dollars into its remaining Mon Valley steel plants. The plan would’ve modernized the equipment and reduced pollution. Instead, U.S. Steel announced it was investing billions of dollars in new non-union steel plants in Arkansas.
Those mills will utilize cleaner, more efficient electric arc furnaces, a technological investment that Chris Briem, an economist at the University of Pittsburgh, said U.S. Steel is making decades later than it should have.
“Electric arc steel mini mills were described once as the prototypical disruptive technology,” Briem said. “It completely changed the nature of the steel industry and U.S. [Steel] ignored it. And they're paying the price.”
Briem said that’s been the pattern the past half-century. The last vestiges of steel production in the Pittsburgh region might be in jeopardy, Briem said — but it’s not because of who will be owning U.S. Steel moving forward. Instead, he said, it’s because decades passed without U.S. Steel making necessary investments in its Mon Valley operations to ensure that it remained competitive.
“So, it doesn't really matter whether it's retained by U.S. Steel or bought by Nippon Steel or one of the other potential competitors,” he said. “Without a lot of investment, it probably isn't going to stay open.”
Concerns over foreign ownership
Meanwhile, the United Steelworkers union is deeply opposed to the sale. President Dave McCall said he’s worried the company won’t honor commitments to union pensions and healthcare. He said he has seen evidence that Nippon plans to further steer investment to non-union plants in Arkansas, neglecting legacy facilities up north.
But he also said the union’s opposition to a foreign buyer is a matter of principle, no matter that Japan is one of the U.S.’s closest allies.
“We've got to be able to make things here in America and control things here in America,” he said. “And then suddenly … they decide that [a Japanese company is] going to be the supplier for steel in America, for key products? I'm concerned about that.”
Pennsylvania U.S. Senator Bob Casey agrees. The Democrat has voted for new laws that he said aim to bring back manufacturing to the U.S. The CHIPS Act and the Inflation Reduction Act offer billions of dollars in incentives for companies that build factories in the U.S. for things like electric car batteries and computer chips.
“You can't exist as a nation if you don't have a manufacturing base and steel is a big part of that,” Casey said.
Casey, Fetterman and Rep. Chris Deluzio sent a letter to Nippon’s leaders this week asking them for additional information about their plans. They also sent a letter to Treasury Secretary Janet Yellen urging her to block the proposed sale, arguing that the country’s core industries should not be dependent upon foreign actors.
Some, though, hold out hope that a sale might represent rebirth, rather than a death knell. Charlie McCollester, a retired academic and founding member of the Battle of Homestead Foundation, wrote a book about the steel industry from a labor perspective. He thinks Japanese ownership could end up being the industry’s saving grace in the region. U.S. Steel has clearly failed, he said, and he thinks Japanese owners might make better decisions.
“They had a certain responsibility towards their workers and ... they have been geniuses at involving workers in the production process from below,” he said.
Back in Homestead, Debolt said that the tension between Pennsylvania workers and foreign owners isn’t anything new. In fact, it was given the Hollywood treatment in 1986 — the same year the Homestead Works plant closed. Pittsburgh-native Michael Keaton starred in the movie, “Gung Ho,” about a Japanese company that agrees to revive an ailing manufacturing plant that had just closed.
“And of course, at the end,” he said, “the workers and the new Japanese owners are getting along fine.”
