The Trump administration has taken a strong stance in the matter of U.S. Steel, putting the brakes on plans to shut down the Illinois facility this fall.
A few weeks back, employees in Granite City, Illinois, were notified that production would cease come November. Despite this, the company, which is a part of Nippon Steel from Japan, assured nearly 800 employees that their salaries would be maintained during this downtime.
According to insiders, Commerce Secretary Howard Lutnick caught wind of the proposed shutdown and reached out to U.S. Steel’s CEO, Dave Burritt, communicating that the administration would not permit such a close-down. Essentially, it looks like President Trump was ready to use his so-called golden share authority to interfere with the plant’s operations.
This comes after the U.S. government approved Nippon Steel’s $14.1 billion acquisition of U.S. Steel back in June with the condition of a national-security agreement. This pact allows the incumbent president to veto any closure of plants in addition to stopping shifts in production overseas.
Fast forward to Friday, U.S. Steel announced that the shutdown plans have been scrapped, and operations at Granite City Works will continue with steel slabs being processed into sheet steel.
“We aimed to keep options open, and it’s great that we found a way to keep operations buzzing at Granite City,” commented the company.
This situation highlights the growing sway of the Trump administration over private establishments. Just last month, Trump stated the government would acquire a 10% equity portion in Intel, which has seen substantial monetary support from the 2022 Chips Act.
Moreover, Nvidia and AMD have likewise committed to contribute part of their AI chip sale earnings derived from sales to China back to the administration.
Concerns have been voiced by union representatives regarding Nippon Steel’s purchase of U.S. Steel; they stressed that the company might shut down plants to import steel made abroad from its other setups. However, Nippon Steel pledged commitment to upgrading the facilities and announced an investment of $14 billion for new installations and repairs.
The local chapter of United Steelworkers—representing hourly workers in Granite City— resisted U.S. Steel’s initial thought of routing tasks to different facilities, labeling it as breaking Nippon Steel’s vow to sustain production at U.S. Steel’s locales.
Under the national-security agreement, Nippon Steel is on the hook to supervise U.S. Steel’s current operations through 2035 and particularly maintain Granite City activities until 2027.
Mike Millsap, a regional director for the United Steelworkers, commented, “They must run the facilities at full throttle. This was exactly the outcome we were worried about concerning Nippon Steel’s involvement.”
During a CNBC interview, Lutnick pointed to U.S. Steel’s plan to provide payroll to workers while the plant was non-operational as complete “nonsense.”
Trump has recognized the crucial significance of the Granite City mill since his first term, often highlighting it as a prime example of success within the U.S. steel sector revamping under his governance.
After implementing tariffs on imported steel in 2018, U.S. Steel witnessed a bounce back, amassing a workforce to restart any dormant operations, particularly at the two blast furnaces in Granite City, inactive for over back-to-back two years due to unsteady prices.
This plant has been part of the steel-making scene for over a century, although U.S. Steel has been cutting back production in recent years.
The mill holds the capability to generate around three million tons of sheet steel annually; however, U.S. Steel ceased steel-making there in late 2023. A big chunk of this production capacity is being shifted to a revamped Big River Steel facility in northeast Arkansas, located roughly 250 miles south of Granite City.
At present, the plant rolls steel slabs from other U.S. Steel locations into sheets.
Attempts to revive operations at Granite City have faced drawn-out uncertainty over the past three years. In 2022, U.S. Steel decided to sell its blast furnaces to SunCoke Energy, which intended to produce pig iron for the Arkansas setup. That deal remains incomplete, encountering sticking points primarily due to resistance from the steelworkers union.
A spokesperson from SunCoke indicated that conversations between their tip-top brass and U.S. Steel are still in progress.
Craig McKey, president of United Steelworkers Local 1899 in Granite City, expressed, “We require a sustainable outlook. We’re prepared to handle the responsibilities, whatever is entrusted to us.”
For inquiries, feel free to reach out to Bob Tita at robert.tita@wsj.com.
