The United Steel Workers Union (USW) has filed grievances against United States Steel Corporation over the pending $14 billion sale to Japan’s Nippon Steel.

The union recently sent a letter to members explaining that it will enforce the successorship clause built into the union’s Basic Labor Agreements.

“The grievance process is designed to resolve disputes internally between US Steel and the USW. The parties may ask arbitrators to get involved if issues cannot be resolved internally,” USW spokesman Tony Montana told The Epoch Times in an email.

The grievances allege that U.S. Steel violated union contracts when it entered into a sale agreement with an affiliate of Nippon Steel Corporation in December.

“We know talk is cheap, especially coming from greedy corporations,” the letter to union members reads. That is why the union negotiated successorship rights into the basic labor agreements, it said.

“These rights are enforceable guarantees that a company seeking to buy our facilities cannot shirk its responsibilities to workers and retirees. Commitments like pensions, profit sharing, capital expenditures, retiree health care and more are all part of the compensation we negotiated in bargaining our contract.”

Any company that wishes to acquire U.S. Steel must have the intent and the financial capacity to honor the contracts, the union said.

Company Defends Sale

In response, U.S Steel indicated that in its eyes, everything is in order.

“U.S. Steel complied with its obligations under the Basic Labor Agreements,” a spokesperson for the company told The Epoch Times in an email. “Our USW-represented employees are an integral part of our operations today and in the future, and we look forward to continuing to work together collaboratively.”

The union told members that U.S. Steel did not include the union in its negotiations with Nippon.

“Rather than reaching out to the union, they decided that Nippon Steel North America, a Houston-based holding company, would assume our labor, pension, retiree, and other agreements,” the letter reads, adding the union did not agree to the arrangement and it has no information about the financial ability of the holding company to stand behind the obligations in the union’s current agreements.

“The USW is prepared to continue this grievance process all the way to its conclusion as we hold management accountable for trying to cash in by selling out American steelworkers and its shocking disregard for our contracts and its dedicated workforce,” the letter reads.

Transaction Scrutinized

The sale of U.S. Steel was announced just before Christmas and immediately resulted in bipartisan opposition in Congress over security concerns. Steel has long played an integral role in U.S. Defense as the material used to build ships, tanks, airplanes, and weapons.

The concern is economic, too.

On Jan. 3, the House Labor Caucus and other members sent a letter to President Joe Biden saying the acquisition “appears to deserve serious scrutiny,” and told the administration to use all available tools to ensure comprehensive regulatory review of the deal and its implications for U.S. workers and the nation’s industrial base.

Cleveland-Cliffs in Ohio made a cash-and-share bid for the company in August, valuing U.S. Steel at $7.25 billion. The union had favored that deal, which kept ownership in the United States.

Nippon agreed to keep U.S. Steel’s name and headquarters in Pittsburgh, but it will become a wholly owned subsidiary of Nippon Steel.

In a November 2023 investor relations briefing, Nippon indicated that it intends to make steel where it is needed, saying its global strategy is to abandon the idea of maintaining domestic production capacity by earning marginal profits from exports and to build a system that captures local demand through local production.

Nippon is making moves around the globe. In Early January, Nippon announced it had closed the sale of a minority stake in Teck Resources Limited, a major producer of steelmaking coal.

Teck is based in Vancouver, British Columbia. Nippon takes a 20 percent stake in Teck’s coal business, known as Elk Valley Resources, in exchange for its prior 2.5 percent interest in one of Teck’s coal operations and $1.7 billion in cash. In November, Teck announced the majority of Elk Valley Resources, 77 percent, was being sold to Glencore PLC for $6.9 billion, a Swiss multinational commodity trading and mining company.

The U.S. Steel sale to Nippon is expected to close in the second or third quarter of 2024, but that could be delayed as the company needs approval by U.S. Steel’s shareholders, regulatory approvals, and regulatory review.