Our Chicago: Impact of planned partnership between U.S. Steel and Nippon Steel
CHICAGO (WLS) -- President Donald Trump recently announced a partnership between U.S. Steel and Nippon Steel.
So far, we haven't heard a lot of details, but there are reports that Nippon will spend billions of dollars on U.S. Steel facilities in Pennsylvania, Alabama, Arkansas, Minnesota and Indiana. That includes U.S. Steel's largest manufacturing plant which located along Lake Michigan in Gary, Indiana.
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Gary Mayor Eddie Melton says during discussions a little over a year ago, the investment in Gary was going to be roughly $300 million.
"After negotiations and discussion, that $300 million moved to a $1 billion investment. And that includes relining the blast furnace, primarily Number 14, which is U.S. Steel's largest blast furnace, which extends the life of steel production at that one facility. But then, that billion made sure that over a 10-year period, that would be invested in another three blast furnaces in Gary, which means more jobs, more steel production for the entire nation," Melton said.
Anthony Sindone is the director of the Center for Economic Education and Research at Indiana University Northwest.
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"With an injection of this capital, it's kind of like a rising tide. We might see improvements. They're not all going to be the same. We're not going to have an increase in production of 10% across the board for each one of the companies, but in total, I think we'll, in the longer run, that we may see some increase in the total value of the steel production in the Midwest," Sindone said.
When it comes to labor implications and the jobs at U.S. Steel in Gary, Melton says, "As the child of a steelworker, this was very important to me in terms of what does this deal mean to the current workers and the future workforce of U.S. Steel."
Melton says currently, about 4,000 people are employed at the Gary Works plant.
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"I was skeptical of the entire deal in the beginning just like many folks, some still are. Now, with this partnership this is guaranteed a certain level of comfort for workers. A $5,000 signing bonus for all [current] U.S. Steel workers, is something that Nippon has guaranteed. Insuring there are no plant closures across the U.S. Steel footprint throughout the United States. And just honoring the existing contract that the steelworkers have knowing that they're coming up on renegotiation," Melton said.
Former President Joe Biden rejected this deal involving a U.S. company and a Japanese company over national security concerns.
Sindone says he's not overly concerned.
"I'm old enough to remember back in the 70s, when we were so concerned about Japanese companies buying Rockefeller Center in New York. 'Oh my gosh, New York real estate is going to go to Japan.' No, it isn't. It's still there, right? Gary Works is still going to be there. The plant in Pittsburgh is still going to be there. OK. It's a matter of how those plants are going to be operated. Now, as far as strategic steel production that's used primarily by the military, or by special construction entities, that can be controlled by the board and my the management, I believe, of Nippon U.S. Steel," Sindone said.
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