President Joe Biden on Friday announced his decision to block the $14 billion sale of U.S. Steel to Japan’s Nippon Steel, citing national security concerns. The move could have serious implications in Gary, where U.S. Steel’s Gary Works plant remains a key employer and economic anchor and where local leaders had strongly supported the deal as vital to the plant’s operations.
Biden’s decision marks an extraordinary use of executive power and reflects his administration’s stance on maintaining domestic control over critical industries like steel.
“Steel production — and the steel workers who produce it — are the backbone of our nation,” President Joe Biden said in a White House statement. “A strong domestically owned and operated steel industry represents an essential national security priority and is critical for resilient supply chains. That is because steel powers our country: our infrastructure, our auto industry, and our defense industrial base. Without domestic steel production and domestic steel workers, our nation is less strong and less secure.”
For Gary, a city historically intertwined with U.S. Steel, the decision has raised questions about the future of its largest employer and the thousands of jobs tied to it.
While most national and industry leaders opposed the sale, Gary leaders, including Mayor Eddie Melton, strongly supported it. Last month, Melton held a press conference inside City Hall with Gary Works employees and Nippon Steel executives, publicly endorsing the deal as essential for preserving jobs and securing critical investment for the plant.
Melton warned that without the merger, U.S. Steel might not have the capital to maintain its facilities, putting jobs at risk. His concerns only deepened after Biden’s announcement on Friday, which he described as a missed opportunity for Gary’s steel industry and its workers.
“As mayor, my job is to protect and build the future for my citizens, and I believe strongly that this transaction was the best deal on the table for steel-making families in cities like Gary,” Melton said Friday afternoon.
Initially skeptical of Nippon Steel, Melton said he shared the concerns of many stakeholders but came to fully support the deal after conducting extensive due diligence.
According to Melton, Nippon Steel had recently pledged to ensure key positions would be held by U.S. citizens, prohibit the transfer of jobs and production overseas, and maintain production capacity at U.S. Steel facilities in states including Indiana, Pennsylvania, and Alabama for at least ten years—promises he believes were overlooked in the decision.
“The potential sale of U.S. Steel to Nippon Steel represented a significant opportunity for Gary and the American steel industry to grow and prosper,” Melton said.
“Now, we face an uncertain future, with Gary Works potentially losing investment and jobs.”
Echoing the national security concerns expressed by President Biden, U.S. Rep. Frank Mrvan reiterated his long-standing opposition to the deal in a statement following Friday’s breaking news.
“Since the initial announcement, I have expressed my sincere distrust of handing over the strength of our Northwest Indiana steel industry and the abilities of our national security and defense manufacturing base to a company that has a proven record of violating our trading laws,” Mrvan said.
Mrvan emphasized the strategic importance of U.S. Steel’s operations in Gary, framing the company as a critical asset for the region and the nation.
“We now know we have this tremendously valuable asset in the City of Gary, and I will continue to do everything I can to build on its success and ensure that everyone in our region benefits from its essential work for years to come.”
United Steelworkers Local 1066, the union representing Gary steelworkers, declined to comment at this time.
In a joint statement issued Friday, Nippon Steel and U.S. Steel expressed dismay over Biden’s decision, calling it a violation of due process and accusing the administration of using the review process to advance political aims. The companies argued that the sale would have revitalized steel communities in Pennsylvania and Indiana while providing job security for American steelworkers.
“Nippon Steel is the only partner both willing and able to make the necessary investments – including at least $1 billion to Mon Valley Works and approximately $300 million to Gary Works as part of $2.7 billion in investments that it has already committed – to protect and grow U.S. Steel as an iconic American company for the benefit of the communities in which it operates and the entire American steel industry,” the companies said.
“Blocking this transaction means denying billions of committed investment to extend the life of U.S. Steel’s aging facilities and putting thousands of good-paying, family-sustaining union jobs at risk. In short, we believe that President Biden has sacrificed the future of American steelworkers for his own political agenda.”
A city forged in steel
Gary’s identity has been inseparable from U.S. Steel since its founding in 1906. Established as a company town, Gary was named after Elbert Henry Gary, the steel company’s founding chairman. During its peak, U.S. Steel employed nearly 30,000 workers in the city, powering its prosperity and making it a symbol of industrial strength.
However, as the American steel industry declined in the latter half of the 20th century, so did Gary’s fortunes. The city’s population has plummeted to less than half of what it was during its 1970s heyday, losing nearly 100,000 residents. Despite these challenges, U.S. Steel’s Gary Works plant remains a cornerstone of the local economy. With an estimated 4,300 employees, it is still one of the city’s largest employers and a vital source of tax revenue for a community striving to rebuild its economic foundation.
Micah Pollak, an associate economics professor at Indiana University Northwest, highlighted the unique relationship between Gary and U.S. Steel.
“Gary was literally built to support U.S. Steel,” Pollak told Capital B Gary in September. “Even today, the company remains a major fixture in the city, but it’s not the same as when most of the population worked there.”
This story has been updated.