The steelworkers union in Granite City praised President Joe Biden’s decision on Friday to block U.S. Steel’s sale to Japanese-based Nippon, but its leadership remains unclear on what’s next for the Metro East mill.
“I just hope at some point we get out of this, where we’re living this way,” said Craig McKey, president of United Steelworkers Local 1899, which represents Granite City Works employees. “I think maybe this decision gets us there sooner than later, because even if there is some job loss, at least knowing is best.”
After the Committee on Foreign Investment in the United States failed to reach a conclusion regarding the $14.9 billion sale in December, Biden, who’d long been skeptical of the deal, came to a final determination. The outgoing president said he nixed the sale because it posed a threat to national security.
“It is my solemn responsibility as president to ensure that, now and long into the future, America has a strong domestically owned and operated steel industry that can continue to power our national sources of strength at home and abroad,” Biden wrote. “And it is a fulfillment of that responsibility to block foreign ownership of this vital American company.”
U.S. Steel and Nippon said the companies’ management was dismayed by the president’s decision, arguing it violated the laws governing foreign investment and was politically motivated.
The fate of Granite City Works has long been in limbo, and the president’s decision does not offer much clarity for the U.S. Steel mill.
Union leadership came out in opposition immediately in December 2023 when U.S. Steel announced its sale to Nippon, expressing discontent that the famed steelmaker did not pick a domestic buyer.
“I'm disappointed that it isn't one of the other steel companies that we were pushing for,” Dan Simmons, former president of the local, said at the time.
Union leadership hoped U.S. Steel would select Cleveland Cliffs, the Ohio-based steel manufacturer that made the first unsolicited offer to buy the company.
Before that deal emerged to sell the entire company, a local energy producer, SunCoke, made an offer for Granite City Works’ two blast furnaces. Union leaders said in 2022 that the sale of the blast furnaces could cost the region roughly 2,000 jobs.
The local deal has since stalled but could be resurrected. Neither Nippon nor U.S. Steel leadership had made any comments about its intentions with Granite City’s steel mill amid the larger purchase.
The lack of transparency surrounding Granite City Works over the past couple of years has been frustrating for local leaders, like Mayor Mike Parkinson, who’s said he’s never gotten a meeting with U.S. Steel leadership.
“Why don’t you tell the American citizens — and the people of Granite City — what you’re going to do with our plant?” said Parkinson, who’s running for reelection this spring. “And then maybe we can support the deal. But without complete transparency and the American citizens knowing what’s going to happen to the American steel foundry that’s been around forever, then none of us are behind it.”
A representative of SunCoke Energy, whose Metro East facility produces a carbon-based fuel used in steelmaking, said the company remains committed to the deal to purchase the blast furnaces.
“We began working on this project with U.S. Steel prior to their strategic alternatives review process, and continue to work with them on the project,” said Shantanu Agrawal, vice president of finance and treasurer of SunCoke Energy. “Beyond that, we cannot speculate on the actions of others.”
Local union leadership would also like to know what’s going happen. Since the SunCoke deal was announced, U.S. Steel shut down the second blast furnace in fall 2023, which led to a few hundred layoffs.
“I’ve been doing this stuff for a lot of years, and it’s pretty taxing,” McKey said. “I can tell you it is very difficult on my membership and their families to have to deal with for the last two years on what their future is going to be.”
McKey and union leaders anticipated Nippon may be leaning toward pursuing the SunCoke deal. Not only did Granite City union officials oppose the Nippon sale on national security grounds, they believed it wouldn’t help them locally, McKey said.
Jerome Katz, a St. Louis University business professor, said he suspects U.S. Steel and Nippon will challenge Biden’s decision to prevent the deal.
President-elect Donald Trump, who also opposed the sale, has promised more tariffs, and Katz said it could be in Nippon’s best interest to continue to pursue the purchase of an American steelmaker to possibly circumvent a tariff on foreign-made steel.
While Nippon has promised to improve the steel mills around Pittsburgh and Gary, Indiana, the firm hasn’t addressed Granite City. If Nippon continues, Katz said it may need to make more promises — like upgrading Granite City Works, which isn’t the most modern mill.
“It's a long shot, but, right now, everything tied to Granite City is a long shot,” Katz said.
Katz also said a potential legal challenge to Biden’s decision could put a freeze on any U.S. Steel assets, meaning the SunCoke deal may remain on the back burner as the courts weigh the matter.
While the steel mill’s future has been in question over the past couple of years, Madison County and Granite City officials have been courting an ammunition manufacturer to town.
The details are scarce during a competitive process to lure the company with incentives, but local officials believe it could employ roughly 300 employees.
“Obviously, we want the mill to be there. We want it to be there forever. We want it to thrive and grow and expand,” said Madison County Board Chairman Chris Slusser, R-Wood River. “But if that doesn't happen, Granite City can't live and die based on what happens at the steel mill — that's not a sustainable model in the future.”
