Calvin Davis and Rayonna Burton-Jernigan, Capital B Gary
With reports that President Joe Biden is preparing to block U.S. Steel’s sale to a Japanese company, a high-stakes battle with significant political and labor implications is unfolding. But as the political theater plays out on a national stage, the stakes are more tangible in Gary, a city originally founded as a company town where just over 4,000 employees work for the U.S. Steel plant.
For Gary, the proposed sale of U.S. Steel is about more than ownership — it’s about jobs, relationships, and the city’s future. U.S. Steel is one of the few remaining economic anchors in an economically distressed town. If the sale to Nippon Steel falls through, questions loom over the $300 million in investments the Japanese company earmarked for Gary Works. Even more dire, U.S. Steel President David Burritt warned that a blocked sale could jeopardize plant operations, potentially putting jobs in Gary at risk.
Gary Mayor Eddie Melton, the son of a steelworker, has expressed deep concerns about the proposed sale. After meeting several times with Nippon’s executive leadership, Melton emphasized securing investments for Gary Works and ensuring the protection of worker contracts if the deal moves forward.
“I strongly agree with her commitment to preserving middle-class, union jobs in our communities,” Melton said, aligning himself with Vice President Kamala Harris’ stance against the sale.
He also underscored the broader implications of the deal: “Although the decision on the pending acquisition will be made at the federal level, every decision will have a local impact on the city of Gary. As Mayor, I will continue to advocate for our citizens to ensure they are not overlooked or burdened by the effects of historical divestment.”
Burritt made the stakes clear from his perspective in a recent interview, stating that a blockage of deals would put some of the company’s U.S. operations in jeopardy, including the $300 million Nippon has pledged to invest in older mills like the one in Gary.
“We wouldn’t do that if the deal falls through,” Burritt said in an interview with The Wall Street Journal. “I don’t have the money.”
Burritt warned that failure to approve the sale could lead to the loss of “thousands of good paying union jobs,” as U.S. Steel would pivot away from its blast furnace facilities, including those in Gary.
Without the funding from the deal, he added, the closure of the Mon Works plant in Pittsburgh would likely result in the company relocating its headquarters to the South.
“If that mill won’t make it to the next decade, why would we stay there?” Burritt said. “We want elected leaders and other key decision makers to recognize the benefits of the deal as well as the unavoidable consequences if the deal fails.”
These sentiments echo the broader concerns driving Biden’s opposition to the sale. The president has cited national security risks and the importance of keeping critical industries under American control. Republican presidential nominee Donald Trump has also spoken out against the sale, vowing to block it if reelected.
Nippon Steel did not respond to Capital B Gary’s request for comment.
Beyond Gary, the proposed sale of U.S. Steel has national implications. U.S. Steel operates 25 steelmaking and finishing facilities across the United States, with major operations in Pennsylvania, Indiana, and Alabama.
In Pittsburgh, the company’s headquarters, employees have rallied in support of the sale to Nippon Steel, emphasizing the importance of the deal to the future of U.S. steelmaking.
A city built on (U.S.) Steel
From its inception, Gary has been intertwined with U.S. Steel. Founded in 1906 as a company town, Gary was named after Elbert Henry Gary, the steel company’s founding chairman.
The steel industry boomed during and after World War II, marking what many Gary residents remember as the city’s heyday and highlighting the deep connection between U.S. Steel and the community. At its peak, U.S. Steel employed nearly 30,000 workers in Gary. However, as the steel industry declined, so did the city’s fortunes.
Today, Gary’s population is less than half of what it was during its peak in the 1970s after losing nearly 100,000 residents. Despite these challenges, U.S. Steel’s Gary Works plant remains one of the city’s largest employers, with an estimated 4,300 workers, and is still a critical source of tax revenue for a city working to regain its economic footing.
Micah Pollak, associate professor of economics at Indiana University Northwest, emphasized the special relationship between Gary and the company.
“Gary is such a unique situation because there are very few cities in the United States you can point to and say; this town was literally built from nothing to support the company,” Pollak said, emphasizing how intertwined Gary and U.S. Steel have been throughout history.
“Since the decline of American-made steel in the 1960s and 1970s, I think you’ve been seeing the two kind of separate,” he added. “U.S. Steel is still a major fixture in Gary, but it’s not the way it was when most of the population was employed by U.S. Steel.”
Stakeholder concerns and union doubts
Despite decades of decline in the steel industry, Gary’s business leaders, like Chuck Hughes, remain deeply invested in U.S. Steel’s future. As president and CEO of the Gary Chamber of Commerce, Hughes has forged relationships with the company over the years and is wary of the potential sale.
“I think it would be more advantageous if it were still [American] owned because the city has established a relationship with U.S. Steel, and domestically, people know each other,” Hughes told Capital B Gary.
“If there’s an ownership change, then we’re starting from scratch. So I think the disadvantage would be the lack of familiarity.”
While business leaders like Hughes express concerns over losing familiarity, union leaders are focused on protecting worker rights in the face of uncertain promises.
On Aug. 15, the United Steelworkers union presented its concerns in an arbitration hearing before U.S. Steel’s three-member Board of Arbitration, voicing doubts about key promises made by Nippon Steel.
Mike Milsap, Steelworkers District 7 director, and International President David McCall issued a joint statement outlining their lack of trust in the guarantees, particularly those regarding job security. The acquisition has drawn opposition from officials across the political spectrum, including Democratic U.S. Sens. Sherrod Brown of Ohio, and Bob Casey and John Fetterman of Pennsylvania.
“Given the clear and present threats that a Nippon Steel acquisition poses to American workers and a critical industry, we believe executive action to block this deal is urgent,” the senators wrote.
“Nippon’s well-publicized promise of no layoffs, plant idlings, and shutdowns through the expiration of the BLA on September 1, 2026, nevertheless allows Nippon to lay off workers and idle operations in the event of unanticipated and significant downturns in business conditions — always a threat in the steel industry.”
For their part, U.S. Steel and Nippon maintain that the deal would benefit its employees and protect national security.
“U.S. Steel will be a much stronger company as a result of the transaction with Nippon Steel, and the American steel industry will be more globally competitive. Nippon Steel has committed to investing nearly $3 billion in our union-represented facilities,” the company said in a statement to Capital B Gary.
According to a U.S. Steel representative, Nippon Steel has committed $300 million to Gary Works specifically.
The Japan-U.S. Business Council responded to the news of Biden’s intent to block the deal by urging the U.S. government to proceed with the review by the Committee on Foreign Investment in the United States with “rigor and impartiality.”
Democratic U.S. Rep. Frank Mrvan, vice chairman of the Congressional Steel Caucus, also weighed in with his support for blockage of the deal.
“I will continue to do all I can as the Representative for the First Congressional District of Indiana to support the domestic steel industry,” Mrvan said in a statement Wednesday.
Looking forward, the U.S. Steel Board of Arbitration panel has 30 days from the Aug. 15 hearing to reach a decision. As of Thursday evening, Nippon Steel says the company has not received any update regarding the deal from the Committee on Foreign Investment in the United States.