Iron Range union applauds Biden’s blocking of U.S. Steel acquisition: ‘We are going to be fine’

U.S. Steel, an important player on Minnesota’s Iron Range, predicted layoffs would come if the U.S. government blocked its merger deal with Japan’s Nippon Steel.

Now, with President Joe Biden doing just that on national security grounds, the union representing steelmakers and iron miners is calling U.S. Steel’s bluff.

“That’s crazy,” said U.S. Steelworkers spokesman Tony Montana.

The U.S. Steelworkers local representing 1,800 U.S. Steel workers on the Iron Range believes work, while always cyclical, will be steady.

“We’re still making pellets every day,” said Steve Bonach, president of USW Local 1938. “And if they are selling our pellets, we are going to be fine.”

U.S. Steel operates two taconite mining operations on the Range, Minntac and Keetac. Bonach said his 1,300 members who work at Minntac in Mountain Iron fully support calling off any deal with Nippon.

Union leaders agree with Biden about keeping high-quality steel production stateside to keep the U.S. defense industry strong. Local 1938 also shares the national USW’s concern that provisions in its contracts would not be honored in the long term, Bonach said.

Nippon has pledged that it would follow all current contracts.

Minntac produces about 13 million annual tons of taconite pellets — a low-grade iron ore used in steelmaking. Keetac, in Keewatin, produces around 6 million tons of the pellets.

U.S. Steel did not respond to a request for comment about potential effects to Iron Range operations Friday. The company threatened legal action in response to Biden’s decision.

“The president’s statement and order do not present any credible evidence of a national security issue, making clear that this was a political decision,” the company said in a statement.

President-elect Donald Trump while campaigning also pledged he would block the U.S. Steel-Nippon deal. He also said last month he would use tax incentives and tariffs to boost the U.S. steel industry while reiterating his opposition to the acquisition.

“It’s weird having Biden and Trump on both sides of the issue,” said longtime Iron Range writer Aaron Brown. “It’s not partisan, it’s whether you believe in an international economy and flow of investor dollars or a nationalistic approach.”

U.S. Steelworkers President David McCall pressed U.S. Steel to reinvest in its business.

“It’s clear from U.S. Steel’s recent financial performance that it can easily remain a strong and resilient company,” he said. “We now call on U.S. Steel’s board of directors to take the necessary steps to allow it to further flourish and remain profitable.”

Outside of cyclical downturns that affected the entire steel and taconite industry over the past several decades, U.S. Steel remains profitable. However, it has seen earnings fall for two consecutive years, and analysts expect a steep profit drop for 2024.

“I am fine with U.S. Steel going it alone,” Bonach said. “The steel industry can be a volatile industry.”

State Rep. Spencer Igo, R-Wabana Township, came out in favor of the acquisition after it was announced in December 2023, saying at the time “new technologies will expand opportunities in Minnesota.”

Biden’s late-term decision “has created tremendous uncertainty for workers and our communities on the Iron Range,” Igo said Friday. “Moving forward I will continue to monitor the situation, partnering with the company and its workers, so we can find a solution that puts Iron Rangers first.”

Cleveland-Cliffs, the largest player on the Iron Range, made a union-backed $8.3 billion offer for U.S. Steel in 2023.

McCall told reporters during a news conference Friday he couldn’t speculate on whether Cliffs might be interested in making another offer to buy U.S. Steel or parts of the company. U.S. Steel’s board would have to review any offer and consider what it wants to do, McCall said.

Cliffs owns Hibbing Taconite and United Taconite in Minnesota. The Ohio-based company has expanded from a taconite miner supplying other companies into a massive steelmaker in its own right after acquiring ArcelorMittal, AK Steel and Stelco in recent years.

Cliffs did not respond to multiple requests for comment on Friday, nor did many representatives on the Iron Range.

Brown and other observers said U.S. Steel is likely to remain on the sale block.

“Now those needed technology investments will take a backseat to a lot of court fights and bluster for the next couple of years,” he said. “That’s not good for the economy or the Range.”