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**DECEMBER 19, 2023**
On the Prospect website
New Merger Guidelines Quietly Reshape the Business Landscape
It just got much harder for companies to buy up their competitors. BY
LUKE GOLDSTEIN
Is AIPAC Good for the Jews?
The complex connections between the Israel lobby and the rise of
antisemitism BY ROBERT KUTTNER
Texas Is Challenging 150 Years of Immigration Law
Senate Bill 4 could be the vehicle for the U.S. Supreme Court to finally
unleash Lone Star Republicans on the world's huddled masses. BY GUS
BOVA
Meyerson on TAP
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**** There Goes Another American Icon, but ...
... What matters in Nippon Steel's purchase of U.S. Steel is what it
portends for its workers.
There is, to begin with, the problem of the names. Nippon Steel buys
U.S. Steel
.
"Nippon" being the Japanese word for Japan; U.S. being the United
States. I can't think of another major company that has "U.S." in its
name.
Algebraically, with the word "Steel" canceling itself out on both sides
of this equation, we're left with "Japan buys United States."
Xenophobic hackles rise, but the real issue here has little if anything
to do with xenophobia, and everything to do with worker well-being.
U.S. Steel is the largest of the four domestic steelmakers; of the other
three, only Cleveland-Cliffs is, like U.S. Steel, unionized. With
support from that union, the United Steelworkers (USW), Cleveland-Cliffs
made an earlier offer to buy U.S. Steel, but the company turned it down.
The offer from Nippon was for a good deal more than any other offer U.S.
Steel had received; the merged company would be either the second- or
third-largest on the planet.
U.S. Steel's relations with the Steelworkers go back a ways. When Mine
Workers President John L. Lewis stormed out of the 1935 AFL convention
over its rejection of his proposal to create industrial unions that
could organize whole factories, not just, separately, the carpenters or
the screw tighteners therein, his intent was to find a way to organize
the steel industry. With the Clothing Workers' Sidney Hillman, he
founded the CIO, which hired hundreds of organizers, most of them
assigned to steel towns and mills. Instead, the breakthrough for
industrial unionism came in the auto plants of Michigan, but the
near-tsunami of organizing that followed immediately on the UAW's 1937
victory convinced U.S. Steel management to recognize the USW and sign a
contract within a few weeks of the UAW's triumph.
At the time, U.S. Steel was still regarded as one of America's top, if
not the topmost, company. Formed in 1901 through the J.P.
Morgan-arranged merger of Carnegie Steel with other steelmakers, it
became the first company on the planet to be valued at over $1 billion,
and employed more workers than any other during the first two decades of
the 20th century. Even before 1950, though, the number of its employees
had begun to shrink as mechanical and technological advances required
fewer workers to turn out the same volume of steel. That process has
continued to this day; when I interviewed John Surma, then U.S.
Steel's CEO, a decade ago, he told me that it then took just two
workers to turn out the same amount of finished product that it had
taken ten workers to do when he'd first come to the company a few
decades earlier.
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As technology reduced the number of workers on the shop floor, it
reduced the number of USW members, too, though the union faced that
challenge by bringing workers in other manufacturing industries into its
ranks. Like some other unions-the Longshore workers come to mind-the
Steelworkers have been able to capture a share of those considerable
productivity gains for their members, as their contracts clearly attest.
It hasn't always been easy: The 1959 strike against U.S. Steel, in
which hundreds of thousands of workers stayed off the job for 116 days,
making it the largest strike (by the metric of worker-days lost) in
American history, clearly attests.
In recent decades, of course, the rise of steelmaking in developing
nations (some of them now pretty well developed) like China, where wages
and expenses on environmental protections were, and are, considerably
lower, has taken a huge toll on American steelmaking as well. Recent
decades have also seen the rise of a few non-union steelmakers, like
Nucor, in Southern states. That's why the union supported the offer
from Cleveland-Cliffs; besides U.S. Steel, it's the only other
domestic steelmaker to have a contract with the USW.
The USW's current contract with U.S. Steel stipulates that the union
can review, and under some circumstances, move to block the proposed
merger. The contract also says that the buyer is obligated to honor the
existing contract for its duration, which at this point is roughly three
more years. Nippon has pledged it will do that, but the USW is
understandably nervous about what would happen then.
Like most Japanese corporations, Nippon boasts of friendly relations
with its largely non-adversarial employee organizations. But other
Japanese corporations that make similar boasts have resisted
unionization when they've opened factories in the U.S. None of the
Toyota, Nissan, or other Japanese car factories in the U.S. are
unionized, and there's no guarantee that Nippon wouldn't also reject
a union once the current contract expires. Unlike Toyota et al., it
would have to fire an already unionized workforce, but that's not a
possibility the Steelworkers can dismiss. Until they get some binding
assurance from Nippon, they, and friends of American workers more
generally, should reject Nippon's offer. And if I were Joe Biden,
I'd weigh in on this as well.
~ HAROLD MEYERSON
Follow Harold Meyerson on Twitter
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