United States Steel Corporation (NYSE: X) (“U. S. Steel” or the “Company”) today announced the Board of Arbitration, which is jointly selected by U. S. Steel and the United Steelworkers (“USW”) to decide disputes between them, ruled that U. S. Steel has satisfied each of the conditions of the successorship clause of its Basic Labor Agreement (“BLA”) with the USW and that no further action under the BLA is required to proceed to closing the pending transaction between U. S. Steel and Nippon Steel (the “Transaction”).
On January 12, 2024, USW leadership filed a series of grievances alleging that the successorship clause in the BLA had not been satisfied. On August 15, 2024, the Board of Arbitration heard evidence and arguments from both U. S. Steel and the USW on the matter. Today, the Board of Arbitration determined that the successorship clause has been satisfied and that, as required by the BLA, Nippon Steel has:
- recognized the USW as the bargaining representative for USW-represented employees at U. S. Steel;
- provided reasonable assurances that it has both the willingness and financial wherewithal to honor the commitments in the agreements between U. S. Steel and the USW applicable to USW-represented employees; and
- assumed all USW agreements that are applicable to USW-represented employees at U. S. Steel.
In making this decision, the Board of Arbitration recognized the repeated written commitments Nippon Steel made to fulfill the requirements of the successorship clause and that no further actions by Nippon Steel were required. Moreover, the Board of Arbitration cited Nippon Steel’s written commitments—including its commitment to invest no less than $1.4 billion in USW-represented facilities, not to conduct layoffs or plant closings during the term of the BLA, and to protect the best interests of U. S. Steel in trade matters—in support of its decision.
With the completion of this arbitration proceeding, all outstanding issues related to the BLA have now been resolved with respect to the Transaction.
Following the ruling, Karl Kocsis, Vice President and Chief Labor Relations Officer for U. S. Steel, commented, “We commend the Board of Arbitration for its thorough review of the USW’s allegations and are pleased with its decision that U. S. Steel and Nippon Steel have fully complied with the BLA. U. S. Steel always has and always will continue to have the utmost regard for our union-represented employees and the role of the USW.”
David Burritt, President and Chief Executive Officer of U. S. Steel remarked, “With the arbitration process now behind us, we look forward to moving ahead with our pending transaction with Nippon Steel. With the significant investments and contractual commitments from Nippon Steel, we will protect and grow U. S. Steel for the benefit of our employees, communities and customers. We look forward to collaborative discussions with the USW and all our stakeholders.”
U. S. Steel and Nippon Steel continue to progress through U.S. regulatory reviews of the pending transaction and work toward closing the transaction by the end of this year.
About U. S. Steel
Founded in 1901, United States Steel Corporation is a leading steel producer. With an unwavering focus on safety, the Company’s customer-centric Best for All® strategy is advancing a more secure, sustainable future for U. S. Steel and its stakeholders. With a renewed emphasis on innovation, U. S. Steel serves the automotive, construction, appliance, energy, containers, and packaging industries with high value-added steel products such as U. S. Steel’s proprietary XG3® advanced high-strength steel. The Company also maintains competitively advantaged iron ore production and has an annual raw steelmaking capability of 22.4 million net tons. U. S. Steel is headquartered in Pittsburgh, Pennsylvania, with world-class operations across the United States and in Central Europe. For more information, please visit www.ussteel.com.
FORWARD-LOOKING STATEMENTS
This press release contains information regarding the Company that may constitute “forward-looking statements,” as that term is defined under the Private Securities Litigation Reform Act of 1995 and other securities laws, that are subject to risks and uncertainties. We intend the forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in those sections. Generally, we have identified such forward-looking statements by using the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “project,” “target,” “forecast,” “aim,” “should,” “plan,” “goal,” “future,” “will,” “may” and similar expressions or by using future dates in connection with any discussion of, among other things, statements expressing general views about future operating or financial results, operating or financial performance, trends, events or developments that we expect or anticipate will occur in the future, anticipated cost savings, potential capital and operational cash improvements and changes in the global economic environment, anticipated capital expenditures, the construction or operation of new or existing facilities or capabilities and the costs associated with such matters, statements regarding our greenhouse gas emissions reduction goals, as well as statements regarding the proposed transaction between the Company and Nippon Steel Corporation. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. Forward-looking statements include all statements that are not historical facts, but instead represent only the Company’s beliefs regarding future goals, plans and expectations about our prospects for the future and other events, many of which, by their nature, are inherently uncertain and outside of the Company’s control. It is possible that the Company’s actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. Management of the Company believes that these forward-looking statements are reasonable as of the time made. However, caution should be taken not to place undue reliance on any such forward-looking statements because such statements speak only as of the date when made. In addition, forward looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from the Company’s historical experience and our present expectations or projections. Risks and uncertainties include without limitation: the ability of the parties to consummate the proposed transaction between the Company and Nippon Steel Corporation, on a timely basis or at all; the timing, receipt and terms and conditions of any required governmental and regulatory approvals of the proposed transaction; the occurrence of any event, change or other circumstances that could give rise to the termination of the definitive agreement and plan of merger relating to the proposed transaction (the “Merger Agreement”); the risk that the parties to the Merger Agreement may not be able to satisfy the conditions to the proposed transaction in a timely manner or at all; risks related to disruption of management time from ongoing business operations due to the proposed transaction; certain restrictions during the pendency of the proposed transaction that may impact the Company’s ability to pursue certain business opportunities or strategic transactions; the risk that any announcements relating to the proposed transaction could have adverse effects on the market price of the Company’s common stock; the risk of any unexpected costs or expenses resulting from the proposed transaction; the risk of any litigation relating to the proposed transaction; the risk that the proposed transaction and its announcement could have an adverse effect on the ability of the Company to retain customers and retain and hire key personnel and maintain relationships with customers, suppliers, employees, stockholders and other business relationships and on its operating results and business generally; and the risk the pending proposed transaction could distract management of the Company. The Company directs readers to its Form 10-K for the year ended December 31, 2023 and Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, and the other documents it files with the SEC for other risks associated with the Company’s future performance. These documents contain and identify important factors that could cause actual results to differ materially from those contained in the forward-looking statements. All information in this press release is as of the date above. The Company does not undertake any duty to update any forward-looking statement to conform the statement to actual results or changes in the Company’s expectations whether as a result of new information, future events or otherwise, except as required by law.
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