Labor union turns up heat in battle over sale of U.S. Steel

In a scathing letter sent by United Steelworkers to its members at United States Steel, the president of the labor group said the company doesn’t prioritize its union workforce and accused it of betrayal.

In the letter seen by Bloomberg, USW President Tom Conway said workers cannot rely on management to put their interests first.

“That’s why the contract we negotiated with US Steel contains strong protections that apply in this very circumstance,” he wrote.

The union plays a pivotal part in any transaction involving the sale of U.S. Steel mills or assets where the steelworkers are employed, and the USW has been vocal about its exclusive support of Cleveland-Cliffs’s $7.3 billion bid to buy the Pittsburgh-based producer.

If U.S. Steel is presented with a “bona fide offer,” the company will provide the union the earliest practical notification and grant it “the right to organize a transaction to purchase the assets,” according to a labor contract signed last year.

Conway last week advised U.S. Steel and Cliffs that the union would transfer its legal right to Cliffs to launch a counteroffer for U.S. Steel.

Conway said in an interview last week that if Cliffs’ USW-assigned bid were to succeed, Cliffs would become owner of U.S. Steel, not the union.

The USW won’t become owners unless they’ve specifically formed an employee-ownership structure, Conway said, something they won’t be doing.

Cliffs CEO Lourenco Goncalves in 2019 and 2020 acquired AK Steel and ArcelorMittal USA assets, all of which had a heavy USW workforce presence.

Goncalves famously kept all those jobs, promising not to close steel mills.

It was a stark contrast from competitor U.S. Steel, which idled various assets over the years that resulted in union job cuts.

Conway in his letter pointed to U.S. Steel scrapping an investment in the Mon Valley facility just outside Pittsburgh, and the company’s continuing effort to sell its blast furnace at Granite City to outsource production of pig iron instead of rebuilding the furnace for its own operations.

“It betrayed workers in the Mon Valley by cancelling the $1.2 billion investment,” Conway said in the letter. “Instead, US Steel purchased non-union Big River Steel for $1.5 billion and in 2022 began construction of a $3 billion state-of-the-art mini-mill at the non-union plant.”

“None of this preserves USW jobs or invests in our plants or communities.” Conway wrote. “We know we cannot rely on management to put workers’ interests first.”

U.S. Steel representatives weren’t immediately available for comment.