On Steel “Déjà Vu”, Time and the Public’s Power: In January 1991, British Steel and Bethlehem Steel announced a merger agreement that would have effectively put British Steel in control. For eleven months, the two Companies and the United Steelworkers tried to negotiate a labor agreement. British Steel refused to provide commitments to honor the existing labor agreement, would not assure pension obligations would be met, guarantee investments, nor was willing to commit to the continuation of various Bethlehem facilities. When the deal was announced in January, British Steel had recorded a $480 million profit. But by November, British Steel was about to report a $104 million loss. A stunning reversal of fortune that doomed an already stalled merger with Bethlehem Steel. Given the emptiness of British Steel’s commitment to the steelworkers at Bethlehem (and a grating arrogance displayed by British Steel negotiators), USW lead negotiator Director Paul McHale happily offered to carry their luggage to the plane, as they announced their departure. Sound familiar? This is a path the USW and its steelworker members are on with USSteel and Nippon, in the recently announced takeover proposal. While many have already concluded that this sale is a foregone conclusion, the 1991 British Steel/Bethlehem Steel merger may have some lessons in it.
First, deals have a time limit. They are made in a financial moment that makes sense to the participants. But in a world with rapidly changing economic flows, the financial underpinnings can change. The longer Nippon refuses to demonstrate it will be a responsible enterpise, the higher the risk that the sale will no longer make sense. In the few short weeks since the announcement, the Cleveland Cliffs near-matching counter-offer has been withdrawn. Stock values have also declined. Time also allows a more complete review of this kind of mega-deal. The full consequences can be understood and weighed.
Secondly, the USW’s opposition to a sale, without commitments, has been treated as a secondary concern. At the moment, the USW is focused on enforcement of our farsighted contract language that gives the Union a major voice in these kinds of corporate restructurings. The USW is also gathering public and political support. The USW has long shown its strategic prowess in its fights for our members. If USSteel/Nippon tries to force their proposal down Steelworkers throats, workers have the ultimate option of refusing to operate the Mills. Workers do matter.
There are also differences. We are in a Presidential election year where blue-collar votes are being hotly contested. The national mood has soured on the current design of globalization. Where Bethlehem was a declining empire, USSteel is profitable and attractive. There is much less concern, than there was with a troubled Bethlehem Steel, that the failure of this deal will have any long-term consequences to the viability of the USSteel assets. Instead, the fight is over who best can meet current employee commitments, fund investment necessary to assure the future of these facilities and stabilize the communities that rely on them. In this different environment, the proposed sale raises the bigger question of how much freedom huge multinational companies should have to enrich themselves at the expense of workers, communities and this nation’s security.
The backdrop of all of this is a sustained global steel over-capacity. Too many mills, too much steel seeking a buyer, too many countries for whom steel is a significant part of their economy. This has resulted in a good bit of maneuvering to “rationalize” steel assets. Put plainly, there is a struggle over what will be shut down and where!
In this over-capacity market, the USW has raised the issue of national security. Steel is an essential part of any 1st nation’s ability to defend itself, grow its economy and contend with global turmoil. Allowing key supply chains and productive capacity to go offshore, is an issue that should not be treated lightly. The USW has been sounding this alarm for decades. The U.S. government is reviewing this issue. Again, something the profiteers want to brush off as irrelevant.
This brings us to another major difference between 1992 and 2024. After losing thousands of family sustaining jobs, millions of tons of industrial capacity, a pandemic that exposed the problems of relying on foreign supply chains and the devastation of blue-collar communities across the nation, the corporate/financial design of globalization has lost its appeal. The USSteel/Nippon proposal is a poster child for why the love is gone. Thus, it becomes a hot political issue, not just a business deal.
The political world has its finger up in the air to test how much resistance there is to approval of this sale. Nippon is also watching carefully to see how long this proposal will take to conclude. If investors sense the government is going sour, they will move on. They are all waiting on a signal from the public.
Every day we are pummeled with the idea that our voices don’t matter. That big money and big business will always have their way with us. The effort to convince us we are impotent is because the biggest danger the greedy and opportunistic face is our collective displeasure. The USW and some political allies (on both sides of the aisle) have stepped up to confront USSteel and Nippon. They need the American public to have our backs. This is a huge opportunity for all of us to start the redesign of globalization. To make it clear that the process must be accountable to those who are impacted. If we bring USSteel and Nippon to that place, we will have made literal earthshattering statement on behalf of workers, communities and the fate of people around the world.
Raise your voice. Tell your elected representatives, from the local to the federal, to stand up for the fight to guarantee the commitments necessary from any purchaser of USSteel. Let them hear our voices. And support the union and its members that are making this fight possible.
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Note: The views in this post are those of the author and are not intended to reflect those of the USW or any other party of interest.