Labor groups applauded Friday as companies criticized the Biden administration's decision to block Japanese rival Nippon Steel's acquisition of steelmaker U.S. Steel, citing national security concerns. sent.
Nippon Steel and U.S. Steel said they were “regretted” by the decision and said the administration had not presented evidence that the deal could harm national security.
“Instead of adhering to the law, the process was manipulated to further President Biden’s political agenda. “This decision has been made clear,” the companies said in a joint release.
The Biden administration said executive branch trade and national security experts said the proposed sale would “put one of the nation's largest steel producers under foreign control and pose a risk to national security and critical supply chains.” It was determined that the
The United Steelworkers (USW) union said the decision was the “right thing to do” for its members and national security.
“Under responsible management, U.S. Steel will continue to support good jobs, healthy communities, and strong national and economic security into the future,” the group said in a statement.
USW Local 2911 President Mark Gryptis told The Hill that the incentives in the proposed sale are unfairly biased toward management, and members believe it is better for national security to keep the company under American ownership. he said.
“The amount is [would have gone] “It was a huge amount to the people at the top — millions of dollars would have gone into the pockets of the people at the top if this deal had gone through,” he said. “They had incentives at the top to make this deal happen.”
Meanwhile, business groups said blocking the deal would send a negative message to U.S. allies whose economies are tied to the United States.
Jonathan Samford, president of the Global Business Alliance, an industry group representing dozens of multinational companies, said, “Japan is one of the United States' strongest allies, and Japanese companies are more involved than any other country.'' “We have reinvested in America's economy and workforce.” statement.
“We are concerned that today's decision sends a strong negative signal to the world,” he added.
Democratic Rep. Chris Delzio of Western Pennsylvania, who represents a traditional stronghold of the U.S. steel industry, expressed support for the decision on social media Friday morning, saying steelworkers should have been included in the negotiation process. insisted.
“The workers who support this company should have been at the table from the beginning. Their livelihoods are at risk,” he says.
Sen. Rand Paul (R-Ky.) slammed the decision, calling U.S. Steel a “struggling company.”
“Preventing the sale of an ailing company to a stronger company will only steal value from U.S. Steel's remaining assets, and the multibillion-dollar cash infusion that Nippon Steel has promised,” he said on social media. By preventing them from doing so, they will only harm the remaining employees.”
U.S. Steel reported 2023 net income of $895 million, or $3.56 per diluted share. The company has approved a stock repurchase program to repurchase up to $500 million in stock in 2022. Throughout 2023, we repurchased $175 million worth of stock.
The Biden administration blocked the sale, citing national security as well as economic practices.
“The Buyer and U.S. Steel shall take all steps necessary to completely and permanently abandon the proposed transaction not later than 30 days after the date of this order,” the White House said in a statement.
U.S. Steel stock fell more than 5% in Friday morning trading on the news, dropping to $30.65 per share as of 11 a.m.
The Committee on Foreign Investment in the United States (CFIUS), an interagency agency that analyzes the national security impact of foreign investment in the U.S. economy, issued a decision on whether to authorize the sale to the White House in December.
“This is a transaction that should be approved on its merits and should serve as a model for 'friendshoring' investing,” U.S. Steel said in a December statement.
On Thursday, the State Department approved a $3.64 billion sale of air-to-air missiles to Japan.
The Department of Defense said the sale “[improve] It is to ensure the security of key allies that are a force for political stability and economic development in the Indo-Pacific region. ”
