Arbitration panel sides with US Steel over USW

A board of arbitration that was jointly selected by U.S. Steel and the United Steelworkers (USW) has determined that no further action pertaining to conditions of the Basic Labor Agreement (BLA) between the two entities is required to close on the pending purchase of U. S. Steel by Japan-based Nippon Steel Corp. (NSC).

The USW and competing bidder Cleveland-Cliffs had suggested the bid offer by NSC violated aspects of the BLA. Cleveland-based Cliffs cultivated the USW as an ally for its bid to purchase U.S. Steel assets last summer.

In January, USW leadership filed a series of grievances alleging the successorship clause in the BLA had not been satisfied. On Aug. 15, the board of arbitration heard evidence and arguments from both U.S. Steel and the USW on the matter.

This week, the board of arbitration determined that the successorship clause has been satisfied and that, as required by the BLA, Nippon Steel has met several requirements spelled out in that agreement.

According to Pittsburgh-based U.S. Steel, the NSC offer has 1) recognized the USW as the bargaining representative for USW-represented employees at U.S. Steel; 2) provided “reasonable assurances” that it has the willingness and financial wherewithal to honor commitments in existing agreements between U.S. Steel and the USW; and 3) assumed all USW agreements that are applicable to USW-represented employees at U.S. Steel.

“In making this decision, the board of arbitration recognized the repeated written commitments Nippon Steel made to fulfill the requirements of the successorship clause and that no further actions by Nippon Steel were required," U.S. Steel says.

The board of arbitration also cited Nippon Steel’s written commitments—including a commitment to invest no less than $1.4 billion in USW-represented facilities and not to conduct layoffs or plant closings during the term of the BLA—in support of its decision.

The company says the completion of the arbitration proceeding signals all outstanding issues related to the BLA have now been resolved with respect to the NSC transaction.

“We commend the board of arbitration for its thorough review of the USW’s allegations and are pleased with its decision that U.S. Steel and Nippon Steel have fully complied with the BLA," says Karl Kocsis, vice president and chief labor relations officer for U.S. Steel. "U.S. Steel always has and always will continue to have the utmost regard for our union-represented employees and the role of the USW.”

U.S. Steel, founded in 1901, is involved in iron ore production and has an annual raw steelmaking capability of 22.4 million tons, operating both blast furnace/basic oxygen furnace mills and the Big River Steel recycled-content electric arc furnace campus in Arkansas.

“With the arbitration process now behind us, we look forward to moving ahead with our pending transaction with Nippon Steel," U.S. Steel President and CEO David Burritt says. "With the significant investments and contractual commitments from Nippon Steel, we will protect and grow U. S. Steel for the benefit of our employees, communities and customers. We look forward to collaborative discussions with the USW and all our stakeholders.”