It ain’t over until it’s over. And Nippon Steel and U.S. Steel are vowing to continue their effort, next in the courts, to merge after what they call Friday’s “unlawful decision” by President Joe Biden, invoking his executive power, to block the proposed $14.9 billion deal on “national security” grounds.
But, as we’ve often documented, the contention is fallacious on its face. And it is instructive to break down the president’s statement to prove that point.
Said Biden:
“As I have said many times, steel production—and the steel workers who produce it—are the backbone of our nation. A strong domestically owned and operated steel industry represents an essential national security priority and is critical for resilient supply chains. That is because steel powers our country: our infrastructure, our auto industry, and our defense industrial base. Without domestic steel production and domestic steel workers, our nation is less strong and less secure.”
But the Nippon-U.S. Steel deal would have preserved and enhanced domestic steel production. Nippon promised to invest billions of dollars for badly needed improvements at U.S. Steel facilities nationwide, including in the Mon Valley.
Heck, Nippon even groveled so low that it was willing to give the U.S. government a 10-year guarantee to not reduce production capacity at U.S. Steel’s mills without approval from federal agencies. That, a misguided foray into the kind command economics that Biden normally loves, to meet the government’s bogus supply concerns.
Without the merger, U.S. Steel was very clear that it does not have the capital to make such improvements – which undoubtedly will lead to the closing of those Mon Valley operations. Additionally, U.S. Steel said it would move its headquarters from Pittsburgh. Thousands of jobs will be lost.
Mr. President, how does that bolster the backbone of our nation? How does that help power our country – our infrastructure, our auto industry and our defense industrial base? How does that make us stronger and more secure?
Further said the president:
“As a committee of national security and trade experts across the executive branch determined, this acquisition would place one of America’s largest steel producers under foreign control and create risk for our national security and our critical supply chains.”
But that’s a blatant lie. The Committee on Foreign Investment in the United States (CFIUS) studied the merger exhaustively and, deadlocked, could not recommend that the Nippon-U.S. Steel merger be blocked on the grounds Biden claimed or any other grounds.
Then there’s the red-herring of “foreign control.” Since the end of World War II, 80 years ago, Japan has been among our most reliable allies on the word stage. An ally, not an adversary such as China or Russia.
And what “risk to national security and our critical supply chains”? Not only does U.S. Steel production represent a negligible part of our “defense industrial base,” the U.S. steel industry at large represents capacity-plus, easily, to see to our national defense needs, in peace and in war.
The president’s Friday decision was one thing and one thing only – a slavish kowtowing to organized labor, the same organized labor that has worked so assiduously, decade after decade, to destroy the domestic steel industry and just about any other industry it touches.
And organized labor, having led the charge against the Nippon-U.S. Steel merger, is at it again. And, again, it will cut off its nose to spite its face. Thousands of jobs, many of them union jobs, will be lost. The tax base in the Mon Valley, long anemic, will be dealt a death knell.
Make no mistake, these deaths are fully preventable. And Joe Biden and his union toadies are solely responsible for this presidential- and union-assisted suicide of U.S. Steel.
Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).
