The logos of Nippon Steel Corp. are displayed at the company headquarters in Tokyo, Japan March 18, 2019. Picture taken March 18, 2019. REUTERS/Yuka Obayashi/File photo
TOKYO — Nippon Steel intends to pursue its proposed acquisition of U.S. Steel and wants its “deep roots” in the United States to be recognized, its new president said – remarks that come after U.S. President Joe Biden expressed opposition to the deal.
The Japanese firm has agreed to buy U.S. Steel for roughly $15 billion but the deal faces an uphill battle to approval in a U.S. election year.
The White House sees steel as critical to national security and Biden said last month that U.S. Steel should remain domestically owned. His opponent in the November presidential vote, former President Donald Trump, has promised to block the deal if he is re-elected.
READ: Biden says U.S. Steel must remain domestically owned and operated
It’s not clear if Biden plans to use any U.S regulatory authorities to scuttle the deal.
“What U.S. politicians are concerned about is jobs and whether U.S. Steel can develop as an iconic U.S. company in the U.S.,” Tadashi Imai told reporters last week before he took on his new role on Monday.
“I am convinced that we’re the most useful partner to help U.S. Steel grow in the United States,” he added.
Imai, 60, became president in a management reshuffle intended to lower the average age of top executives but in a break with tradition, its charismatic former president Eiji Hashimoto has taken on the title of chief executive and will be in charge of shepherding the acquisition.
The proposed deal has drawn strong criticism from some lawmakers and the United Steelworkers (USW) labor union which is worried about potential job losses.
No job cuts
Japan’s largest steelmaker has pledged no job cuts as a result of the deal, to honor all agreements between the union and U.S. Steel as well as to move its own U.S. headquarters to Pittsburgh where U.S. Steel is based.
Imai said he was hopeful that Nippon Steel would come to be seen as a firm with deep roots in the U.S., noting that it has had a presence there since the 1980s and has 4,000 employees in the country, some of whom are also members of the USW.
“The most important thing and the only thing that we can do is to talk to the USW in good faith,” about investment plans and measures to raise the competitiveness of U.S. Steel, he said.
READ: Japan’s Nippon Steel to buy U.S. Steel in $14.9-B deal
Imai said that the acquisition would give U.S. Steel access to Nippon Steel’s advanced technologies such as electromagnetic steel sheet, adding that the Japanese firm has some 2,000 steel patents in North America while U.S. steelmakers in general had roughly 200 each.
At home, Imai’s main focus will be decarbonisation, he said, adding that the company will soon need to make investment decisions on whether to invest in new electric furnaces at two sites – the Kyushu Works Yawata site in southern Japan and Setouchi Works Hirohata site in western Japan.
The company must decide on the projects either this financial year or the next one, Imai said.
“It will be a huge investment … but the time for a key decision is approaching on the technical certainty and predictability of the return on investment.”