With U.S. Steel employees surrounding him, Mayor Eddie Melton on Thursday announced his support for the company’s acquisition by the Japanese company, Nippon Steel.
“As the 22nd mayor of Gary, I wanted to show my support for this effort because we have done our due diligence to make sure that it’s the right thing for our citizens, our economy and the right thing for the United States,” Melton said. He said that he supports the deal because he and many employees believe it is necessary to preserve the 4,000 or so U.S. Steel jobs that remain of what was once more than 30,000.
The sale has faced opposition from the highest levels of American government, including from President Joe Biden, who said the deal raised national security concerns, and from President-elect Donald Trump, who said he opposed the company’s sale to a foreign company. Melton’s support for it pits him against those powerful adversaries, other U.S. government officials and leaders of the United Steelworkers union. But there are Black leaders in Washington who also support the deal.
Melton read from a Nov. 21 statement sent to Biden and signed by Reps. Bennie Thompson of Louisiana and Maxine Waters of California, members of the Congressional Black Caucus. In it, they expressed their support for the deal while recognizing Gary’s plight.
“The city of Gary has shouldered the economic and environmental consequences of U.S. Steel’s operations, enduring divestment, job losses and diminished community investment. The steel industry’s decline has left a lasting mark on Gary, where citizens deserve security and assurance that their quality of life will not be further jeopardized.”
Caucus members point to Nippon’s commitment to making investments in the Gary Works plant and preserving union jobs. By contrast, U.S. Steel’s leadership has said that a failed merger could lead to further plant closures and job loss.
“What really concerned me about this deal not going through is that the current CEO of U.S. Steel mentioned that there would be closures if this deal did not go through, because U.S. Steel does not have the capital to make the investments,” Melton said in a recent BBC interview.
“I want to be very clear, although Gary would benefit as a city, my main concern is I want to make sure that the plants are not closed, to make sure that jobs are secure for the years to come.”
Part of the reason that Black leaders in Gary support the sale is that they view U.S. Steel as a bad corporate citizen that has shortchanged the city by failing to pay its fair share of taxes. The state allows the company to assess its own property value, which has remained at $109 million for years, an amount that Black leaders say is too low.
Lake County Councilman Charlie Brown, who represents Gary on the board, is one of those leaders.
“It was most unusual that when I was in the General Assembly, the state allowed U.S. Steel to do its own assessment, not to have outside assessment of its property, which still doesn’t seem very fair,” Brown told Capital B Gary.
Nippon Steel made an initial promise of a $300 million investment to repair one of Gary Works’ three blast furnaces. Melton said he’s hopeful Nippon is open to fixing the other furnaces, which are expected to expire within 20 years.
The Committee on Foreign Investment in the United States, an interagency committee that falls under the U.S. Department of Treasury, is tasked with advising Biden by Dec. 22 or 23 whether the sale poses a security risk, according to the steelworkers union.
As the two companies continue negotiating the terms of a deal, Nippon recently pledged a $5,000 bonus to all United Steelworkers employees, a move the union viewed as “bribery.”
A Dec. 10 statement released by the union reads:
“Nippon Steel today employed a classic union-busting tactic in a final, desperate attempt to win over support for its doomed acquisition of U.S. Steel: simple bribery.”
“We have seen this sort of corporate behavior before, and we know what it really means. Nippon is begging for union members to trade our long-term stability and bargaining power in exchange for a single payment. But we won’t be fooled.”
In a video released earlier this month, union President David McCall said he was still opposed to the deal, citing Nippon’s expressed plans to move work from current facilities to Big River Steel in Osceola, Arkansas.
“We recognize the offer is a good deal for [U.S. Steel] CEO David Burritt and some of his top executive management team and the institutional stockholders; however, the union does not think it’s a good deal for workers,” McCall said.
It was originally announced by U.S. Steel in December 2023 that Nippon was set to acquire the company in an all-cash transaction at $55 per share, for a total enterprise value of $14.9 billion.
Attention surrounding the deal has intensified since the presidential campaign, when both candidates — along with President Biden — announced plans to block the deal.
Trump reiterated his plans in a post on Truth Social earlier this month:
