Sen. John Fetterman (D-PA) made a video from his house, which overlooks a U.S. Steel facility, to offer his views on the proposed sale of the iconic American brand to Nippon Steel of Japan. In it, he argued there would be a blow to regional and national pride if America’s leading steel company falls into the hands of a Japanese competitor. Fetterman said he was worried about the jobs that may go away, the strategic ramifications of our largest supplier of a segment of war materiel being owned by a foreign company, and America’s inability to preserve what made it great.
“It’s absolutely outrageous that they have sold themselves to a foreign nation and a company,” Fetterman said.
It’s a familiar argument. Should government meddle in who owns U.S. businesses, or do the potential consequences of foreign ownership in terms of jobs, national security, and supply chain problems demand oversight?
This time, government should butt out.
The national security arguments largely do not apply here. Japan is an ally, Nippon Steel is a publicly traded company completely independent of the Japanese government, and America can meet its strategic steel needs with no help from U.S. Steel, regardless of who owns it. Some even argue that the cutting-edge technology Nippon could bring will itself be a strategic asset for the U.S.
The jobs argument likely won’t hold water either. The operation will still be called U.S. Steel. It will still be headquartered in Pittsburgh, and it plans to honor all the union contracts.
Moreover, Nippon has made it clear it wants U.S. Steel badly. U.S. Steel is being purchased because demand is at an all-time high, and Nippon believes the U.S. Steel plants can be successful if modernized with the cutting-edge technology Nippon has developed. They’re not interested in stripping it down and selling it off. They’re interested in growing it as it is and where it is for the American market.
Nippon already has a corporate footprint in Houston and operates eight steel facilities in the U.S., including Standard Steel in Burnham, Pennsylvania, and Wheeling-Nippon Steel in Follansbee, West Virginia.
Nippon sees electric vehicle makers and manufacturers of windmills and other green energy devices as potential sources of growth in coming years. Its breakthrough technologies, including hydrogen injection technology for blast furnaces, high-grade steel production in large electric arc furnaces, and the use of hydrogen in the direct iron reduction process, all point toward reduced emissions.
Nippon also plans to add capabilities so U.S. Steel can manufacture American-made high-grade steel products such as electrical steel and automotive flat steel.
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The story here is that an aging U.S. company, one that made some decisions that drove away investment and endangered its continued livelihood, can be saved by one of the strongest companies in the world in its industry. Instead of aging equipment and manufacturing processes, the iconic American brand will be able to take advantage of its new owners’ expertise in new and more efficient processes — all while the brand keeps its name, maintains its location, honors its union contracts and pay scales, and transforms itself from a brand struggling to turn around its ship of state to a more agile, responsive competitor.
Fetterman is right to be concerned about what such a move could mean to his state. But in this case, Nippon Steel comes not to plunder U.S. jobs and technology but to remake and strengthen one of its most powerful and iconic brands.
Brian McNicoll is a freelance writer based in Alexandria, Virginia, a former senior writer for the Heritage Foundation, and former director of communications for the House Committee on Oversight and Government Reform.
