The United Steelworkers union has filed grievances against U.S. Steel, alleging the Pittsburgh-based steelmaker violated its contracts with the union when it entered an agreement in December to be acquired by Nippon Steel Corporation.
The international union and union locals in Illinois, Indiana and Minnesota filed the grievances, alleging U.S. Steel violated the successorship clause in its basic labor agreements with the USW when it entered the $14.9 billion deal on Dec. 18 with a Houston-based North American holding company of the Japanese steel conglomerate.
U.S. Steel violated the contracts "in a number of ways," the USW said in a statement to its members issued late Friday.
Also in its statement, the USW questioned whether Nippon Steel North America has the resources to adhere to and fulfill the terms of the union's four-year contract with U.S. Steel, which would remain in effect after a sale.
"These rights are enforceable guarantees that a company seeking to buy our facilities cannot shirk its responsibilities to workers and retirees," the USW said.
The USW said in its statement U.S. Steel entered the sale agreement without reaching out to the union, and the company did not share information about Nippon's finances or ability to fulfill U.S. Steel's existing labor, pension, retiree and other agreements with the USW.
"... We did not agree to this arrangement, nor do we have any information about the financial wherewithal of this holding company to actually stand behind all of the obligations of our existing agreements," the USW said in its statement.
"Commitments like pensions, profit-sharing, capital expenditures, retiree health care and more are all part of the compensation we negotiated in bargaining our contract. Anyone who wants to acquire our facilities must have both the intent and the financial capacity to honor them."
In a statement Saturday, U.S. Steel said it "complied with its obligations under the Basic Labor Agreements, and [it] expect[s] to work through and favorably resolve any grievances filed by the USW as quickly as possible.
"Our USW-represented employees are an integral part of our operations, and we will continue to work collaboratively with the USW and support our employees," the company said in its statement.
When U.S. Steel announced the sale agreement on Dec. 18, it said "all of [its] commitments with its employees," including existing collective bargaining agreements with unions, would be honored and Nippon Steel was "committed to maintaining these relationships uninterrupted." The company also said it would "retain its iconic name and headquarters in Pittsburgh."
Under the sale agreement, Nippon Steel will pay $55 per share for U.S. Steel. Nippon Steel said the deal will bolster its manufacturing and technology capabilities, expand its U.S. production and add to its positions in Japan, India and Southeast Asia.
The agreement came after U.S. Steel in August rejected a $7.3 billion buyout offer from Ohio-based Cleveland-Cliffs Inc. and said it was reviewing “strategic alternatives” after receiving several unsolicited offers.
The acquisition has been approved by the boards of both companies and is targeted to close in the second or third quarter of 2024. It still needs approval from U.S. Steel shareholders.
The deal has attracted scrutiny and opposition from regional and national government leaders and lawmakers, including Pennsylvania U.S. Sens. John Fetterman and Bob Casey, both of whom said the company should remain under U.S. ownership. Environmental advocates, who have long targeted U.S. Steel's plants in Western Pennsylvania as a source of particulate matter pollution, also have expressed both concern and optimism about the potential effect of the sale on efforts to mitigate emissions and the environmental impact of the plants.
In December, officials from President Joe Biden's administration said he “believes the purchase of this iconic American-owned company by a foreign entity — even one from a close ally — appears to deserve serious scrutiny in terms of its potential impact on national security and supply chain reliability.”
Lael Brainard, the director of the National Economic Council, indicated then the deal would be reviewed by the secretive Committee on Foreign Investment in the United States, in which she participates. It includes economic and national security agency representatives to investigate national security risks from foreign investments in American firms.
The Associated Press contributed to this report.
