With just days left to save the deal of his lifetime, Takahiro Mori has been flying on a borrowed jet between meetings with Washington’s most powerful officials and hastily arranged sit-downs with rustbelt steelworkers.
By Monday, US officials must decide whether to allow his company, Nippon Steel, to complete a $15bn takeover of US Steel, the iconic Pittsburgh-based company founded as American industry came of age early in the 20th century.
Mori’s charm offensive has been months in the making. But its odds of success are dimming.
Opinion among the US officials who will rule on the deal by December 23 is divided, which means the final decision could come down to President Joe Biden — who has already said he is against the Japanese company’s bid. So is president-elect Donald Trump.
At stake are jobs across America’s rustbelt — and how Washington thinks it can preserve them: through the kind of protectionism espoused by Biden and Trump in this year’s election campaign, or by relying on deep-pocketed foreign corporations such as Nippon Steel.
The result will also send a signal internationally about whether the US, long the most important foreign market for Japanese companies, still welcomes overseas investment from allies in Europe and east Asia. It comes as Trump has vowed to offer incentives to encourage companies to invest in the US.
Even in the Mon Valley region around Pittsburgh — where Nippon has focused a campaign for hearts and minds and US Steel has warned of job losses if the deal is blocked — powerful voices are sceptical.
The deal’s most prominent opponent has been the United Steelworkers union and its president, Dave McCall, who has remained a vehement critic despite the entreaties by Mori and his fellow steel executives on both sides of the Pacific.
In an interview in the union’s imposing Pittsburgh headquarters, McCall said he needed Nippon to guarantee it would protect jobs — but suspected the Japanese company would wind down the US mill to ship in cheaper foreign steel.
“We think eventually they’ll quit,” said McCall. “They’ll harvest our assets, our blast furnace assets, and will then be able to import products from that excess capacity [in Japan and other countries they produce in] into the United States.”
Nippon denies this and instead has detailed how it would spent $2.7bn on new US capacity in Gary, Indiana, and the Mon Valley. In one valley town, Clairton, steelworkers have been bombarded with radio and television adverts and glossy flyers touting Nippon’s promised investments — and jobs.
“I’m trying to watch the football, and then there’s another commercial about Nippon, for God’s sake,” said Don Furko, the former president of USW local 1557 in Clairton.
Furko said he and his colleagues were also “dead against” the deal.
“People are concerned about their pensions, and also that America should make its own steel,” he added. “This is not a xenophobic thing, this is a patriotic thing.”
Those anxieties are echoed in Washington. A decision this weekend would mark the end of a corporate tussle that became a political touchstone in the election, especially in the swing state of Pennsylvania.
Nippon’s biggest hurdle is still Cfius, the federal inter-agency panel that assesses the national security implications of foreign acquisitions. Unless the committee unanimously greenlights the transaction, approval — or denial — will be up to Biden.
Last weekend, the US Treasury, which chairs the Cfius committee, wrote to lawyers representing Nippon and US Steel to outline the panel’s anxieties about the deal.
Among the concerns raised in the department’s 29-page letter, seen by the FT, was the possibility that the Japanese company might make future decisions that would reduce the US’s domestic steelmaking capacity and force the US to be too reliant on imports.
At least three of the Cfius agencies, including the Treasury, Pentagon and state department, have concluded the acquisition of the iconic American steelmaker poses no security risks. Katherine Tai, the US trade representative, is among others who oppose the deal, according to people familiar with the talks.
Whatever the Biden administration decides, the implications will reverberate from Washington to Tokyo, signalling the US’s stance on protectionism even before Trump enters office with a promise to steepen tariffs.
Much closer to home, say supporters of the deal, many jobs are on the line.
In September, US Steel’s boss, David Burritt, warned the company would close some of its mills and move its headquarters out of Pittsburgh if its merger with Nippon faltered.
“Here in the Mon Valley, we’re a ticking time bomb if this deal doesn’t go through,” said Jack Maskil, vice-president of USW Local 2227 in West Mifflin, south-east of Pittsburgh.
Jason Zugai, president of the same branch, said most of the local union members backed the deal as an opportunity to save jobs and secure their factories and steelmaking facilities.
Zugai, a Biden supporter, was given an opportunity to lobby Trump during a photo shoot in Pittsburgh the night before the election in November.
“I took my 12-year-old daughter with me to give me a better chance of being able to talk to him when the photo was being taken,” said Zugai. “I told him: ‘You said you want foreign investment and you want to save jobs — with this you’re getting both’.”
“I asked him not to say he would kill the deal, not at this rally when I’ve brought all these steelworkers to see him,” Zugai said. “And he didn’t say it — he said nothing for weeks.”
In early December, Trump, who will replace Biden in the White House on January 20, posted on Truth Social that he would block the deal.
McCall denies ever having met or spoken to Trump. “We sent him a letter and said, you know, we know there’s lots of issues, and we think we can work together, and we want to open up a conversation,” McCall said.
“For us it’s about our members, and about their job security, their employment security, their economic security, and their retirement security,” said McCall. “So anybody that supports that policy — we support them.”
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