(Reuters) -The United Steelworkers union has expressed concerns about Nippon Steel’s latest proposal that would give the U.S. government a veto over any potential reduction in U.S. Steel’s production capacity if they are given approval to merge.
The union, which has opposed US Steel’s merger with the Japanese steel giant, said Nippon’s bid fails to maintain long-term production or increase domestic capacity at integrated facilities.
“Protecting capacity simply means mothballing our equipment so that it can rust to the point where it is no longer feasible to restart,” the union said in a statement on its website on Thursday.
The proposal “is nothing more than a ‘Hail Mary’ pass destined to fall to the ground,” it added.
According to reports, Nippon Steel made a proposal on Tuesday to give the government the final say on any production cuts as part of its efforts to secure President Joe Biden’s approval for the takeover of the US steelmaker.
In 2023, Nippon closed the deal to buy US Steel at a hefty premium, but the merger has since faced opposition from both the powerful steelworkers union and politicians.
“The truth remains that this transaction is the best way to ensure that US Steel, including its employees, communities and customers, will thrive well into the future,” US Steel said Thursday in response to the union’s statement.
The Committee on Foreign Investment in the United States (CFIUS) has referred the decision to approve or block the deal to Biden, who must decide on the deal by January 7.
Failure to take action would result in automatic approval of the merger.
Nippon Steel did not immediately respond to Reuters’ request for comment.
