(Reuters) – The United Steelworkers union has expressed concerns about a recent proposal by Nippon Steel Corp that would give the U.S. government veto power over any potential reductions in U.S. Steel Corp's production capacity, if it gets approval for a merger.
The union, which opposed US Steel's merger with the Japanese steel giant, said Nippon's bid failed to commit to long-term production sustainability or boost local capacity at integrated facilities.
“Protecting capacity just means freezing our equipment, allowing it to rust to the point where it can no longer be restarted,” the union said in a statement on its website Thursday.
She added that the proposal was “nothing but the Hail Mary card that was supposed to fall to the ground.”
Nippon Steel has submitted a proposal to give the government the final say on any potential production cuts, as part of its efforts to secure President Joe Biden's approval of the takeover of the US steelmaker, reports said on Tuesday.
In 2023, Nippon closed a deal to buy US Steel at a hefty premium, but the merger has since faced opposition from the powerful steelworkers' union as well as politicians.
“The fact remains that this transaction is the best way to ensure that US Steel, including its employees, communities and customers, thrives well into the future,” US Steel said Thursday in response to the union's statement.
The Committee on Foreign Investment in the United States has referred the decision to approve or block the deal to Biden, who must make a decision on the deal by January 7.
If no action is taken, this will result in automatic approval of the merger.
Nippon Steel did not immediately respond to a Reuters request for comment.
