The next step in assessing the Nippon/USSteel deal is the financial deal itself. We have seen this movie before. Nippon is proposing to pay an estimated 30% more for USSteel than its real value. In the process, it enriches current executives and stockholders with billions of dollars. This is the classic “strip-mining” operation that has degraded and ruined many iconic American companies. The extra 30% has to come from somewhere outside USSteel. Either Nippon will front the money, or it will be borrowed against USSteel’s assets. To pay that back means milking US Steels assets for as much cash as possible. The tactics are limited investment, reductions in maintenance, disposing of as many commitments to its workforce as possible, withdrawing support for host communities and in a number of cases, using bankruptcy to get out of both supplier obligations and worker commitments to wages, pensions and healthcare. Les Leopold, in his recent book “Wall Street’s War on Workers”, details how playbook has been used, over and over again. What we have to realize is that USSteel isn’t being sold because its on the rocks. It’s being sold to cash out its profitability.
In effort to keep us from the above truths, Nippon/USSteel has carried out a massively funded public relations campaign that seeks to first convince us that their unenforceable promises are good for employees, host communities and the nation. When they weren’t making a lot of headway with this approach, they began to fear-monger that USSteel would shut down its facilities unless the deal goes through. Essentially unleashing a campaign of terror in the Mills and Mill towns USSteel impacts. In a last superficial effort at outright bribery, they offered $5k to workers, if the deal went through. The PR campaign has bullied, scared and influenced some workers and politicians. What it hasn’t done is alter the United Steelworkers insistence on real guarantees or the clear-minded positions of the President and President-elect. They know the American public has turned the page on this failed approach to our economy, jobs and global trade.
The truth is that USSteel is a profitable entity. A number of other investors are interested. There is life after Nippon. The nation needs to follow the USW and both Biden’s and Trump’s lead on disposing of the Nippon deal. No one should try to sell the real stakeholders on the notion that nothing will change. It will. We need to insist that the profits, the industry is now enjoying, are invested in upgrading to the steel industry we need, going forward. Not stuffed into executive and global money manipulators pockets. The key to all of this is to make sure USSteel’s operations (and in fact our entire steel industry) becomes a modern and environmentally sustainable industry that preserves good jobs, stabilizes host communities and maintains the nations control over its steel capacity. If we focus on what needs to be done, commit to transitioning the industry and assure its workforce their futures, then we will have a vital part of our economy back on to stable ground. The Nippon/USSteel deal does not move us down that path.
Beaver County Blue: Voice of the 17th CD of Progressive Democrats of America 