PITTSBURGH — The union representing more than 11,000 of U.S. Steel Corp.’s employees, including those at the Mon Valley Works, transferred its ability to bid for U.S. Steel to Cleveland-Cliffs on Thursday, marking a slight escalation of the union’s support for a takeover of the Pittsburgh-based steelmaker.
The United Steelworkers union has exclusively supported Cleveland-Cliffs in what emerged earlier this week as a public bidding war, choosing to support the Ohio-based steelmaker because of its belief that the company would continue blast furnace operations in Western Pennsylvania and save union jobs.
Cleveland-Cliffs’s CEO Lourenco Goncalves, whose company has offered $7.4 billion for its rival steelmaker, made that commitment clear in a statement Thursday night.
“To the employees of U.S. Steel who are watching this all unfold: I have your back,” he said.
U.S. Steel responded in a statement Friday morning that it does not need union support to sell itself.
“While the (basic labor agreement) provides the USW with successorship rights and the right to bid, it does not provide the USW or its assignee the right to veto any transaction,” the company said. “Our commitment and ability to conduct a comprehensive and thorough review of strategic alternatives to maximize value for our stockholders remain unchanged.”
According to the agreement, any prospective buyer will have to recognize United Steelworkers as the bargaining representative for its new employees, and provide the union with “reasonable assurances” that it will continue to honor U.S. Steel’s commitments.
U.S. Steel and USW have both been approached by several bidders. Sewickley-based Esmark Inc. said Monday that it offered $7.8 billion in cash. Reuters reported that ArcelorMittal SA, the world’s second-largest steelmaker, was considering making an offer.
Goncalves also signed off on a letter from United Steelworkers agreeing to assume the union’s current labor agreement with U.S. Steel.
In December, U.S. Steel said its new labor deal, which is in effect until September 2026, included 5% base wage increases each year for four years, a $4,000 bonus payable upon ratification, in addition to increases in contributions to pension and 401(k) funds. The deal includes uncapped profit-sharing.