Nippon Steel promises $1B investment in Gary with U.S. Steel acquisition
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Japan-based Nippon Steel unveiled plans Thursday to invest almost $1 billion in U.S. Steel’s Gary Works if its proposed acquisition of the Pittsburgh-based steelmaker goes through.
Altogether, Nippon Steel Vice Chairman Takahiro Mori said the company was set to invest no less than $2.7 billion across U.S. Steel’s entire footprint.
“Nippon Steel will protect and grow U.S. Steel to secure a prosperous future for its employees, customers and communities,” Mori said at a press conference in Gary alongside Mayor Eddie Melton. “Gary Works has been central to the company’s history and success, and we have already committed to nearly $1 billion in investments.”
In addition to the $14.9 billion deal to acquire U.S. Steel, Mori said the company would invest $950 million to upgrade and extend the life of the facilities and equipment at U.S. Steel’s flagship steel mill in downtown Gary, and possibly revive the tin mill that was idled in 2022.
The investment includes the previously announced $300 million commitment to revamp the Blast Furnace #14 at Gary Works.
“We at Nippon Steel believe that this partnership will be the beginning of a bright new future at U.S. Steel,” Mori said. “It is by all measures, the path that minimizes uncertainty, maximizes investment, and delivers very real shared success to the people.”
Mori speaks about the possible $1 billion investment in Gary and shares why the merger is the best way forward for U.S. Steel.
Regarding the Committee of Foreign Investment in the United States’ (CFIUS) upcoming decision on the deal’s national security impact, Gary’s Mayor Eddie Melton highlighted the fact that Nippon Steel has been in the U.S. for decades. The company operates three plants in Indiana, eight nationwide, and currently employs about 4,000 people.
“As of today, there’s been no reports on any national security issues as it relates to this potential sale,” Melton said. “There shouldn’t be an issue for us to allow one of our closest allies in Japan, a company that has been in Indiana for over 50 years.”
Named after the founding chairman of U.S. Steel, Elbert Gary, the city was a major player in the steel industry until the 70s, when the manufacturing industry experienced a downturn; it never recovered.
Faced with population decline and increasing unemployment, the merger could herald the future of the city. At its peak, Melton said Gary was home to more than 200,000; now only about 70,000 remain.
“Gary has had its fair share of impact of the downturn of the steel industry over the last several decades,” Melton added. “So as 22nd mayor of the city 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 the citizens, it’s the right thing for our economy and it’s the right thing for the United States.”
As a former boiler operator and now managing safety and security for facilities in Gary and Midway, Gary native Terry Carter sees the value in ensuring the plants remain open.
“I think it’s the best thing for our facility,” Carter said. “To keep the city of Gary moving, keeping this plant running and keeping a lot of people in.”
Reading from a letter Congressman Benny Thompson, and Congresswoman Maxine Waters sent to President Biden in support of the proposed acquisition, Melton reiterated that U.S. Steel’s leadership had been unresponsive and had indicated that a failed merger could result in further plant closures, leading to a negative outcome for Gary’s economy.
“For years, the city of Gary has shouldered the economic, and environmental consequences of U.S. Steel’s operations. Enduring divestment, job loss, and diminished community investment,” he read. “The steel industry’s decline has left a lasting mark on Gary, where citizens deserve security and assurance that their quality of life would not be further jeopardized.”
In addition to the financial investments, Melton said that the company had promised to prioritize job security, honor current U.S. Steelworkers labor agreements, effect environmental remediation, and comply with EPA air quality standards. He also said Nippon Steel had committed to fair financial contributions to support local infrastructure and services. In light of these, Melton called on President Joe Biden to approve the sale before the end of his tenure.
While United Steelworker corporate safety coordinator Brian Carlson does not have all the details, he said he trusts USW’s leadership to reach an agreeable decision.
“I feel that our international union is doing a very good job at negotiating, so I leave all the efforts in their hands,” Carlson said. “This is a negotiation that they will, to the best of their ability, do what’s right for us.”
Addressing USW concerns about offshoring jobs, Mori said the company had no plans to transfer jobs or production overseas and would work to protect U.S. Steel from unfair trade. He also emphasized that production materials will remain locally sourced and will not be imported.
“We have been clear from the outset that there will be no job loss or plant closure because of this deal. If anything, we will need more steel workers to meet our vision for the future,” Mori said. “With Nippon Steel’s investment and technology sharing, we will protect and grow facilities like Gary Works so that it continues to serve as an economic engine for Gary, Lake County, and the region for decades to come.”
On Tuesday, Nippon Steel announced its plan to provide a $5,000 closing bonus to all U.S. Steel employees. Mori said the bonus was in response to comments from union leaders that “rank and file” employees hardly ever benefitted from deals like this one. With over 4,000 Gary Works employees, this bonus could translate to an increase in immediate purchasing power by more than $20 million, should the deal be approved.
Employees held a rally Thursday at the U. S. Steel Mon Valley Works Clairton Plant in support of the Nippon Steel transaction. The group called on federal officials to make a decision based on the merits of the sale, without regards to politics.
“I’m still hopeful that we can secure the support of the USW leadership, because we want to partner with them to make U.S. Steel the best company it can be,” Mori said. “I am confident that we will successfully close this deal so that together, we can support a prosperous future for U.S. Steel, where talented American workers are making steel products in America, for Americans.”