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Future of Granite City plant in limbo after Japanese company buys U.S. Steel

A U. S. Steel worker watches as a slab of steel moves through the production process.
Derik Holtmann
Belleville News-Democrat
A U.S. Steel worker watches as a slab of steel moves through the production process.

Updated at 5:20 p.m. Dec. 18 with comments from the local steelworkers union

The future of Granite City Works under new ownership will likely remain an unanswered question for some time.

The Japanese-based Nippon Steel Corp. has agreed to purchase U.S. Steel, parent company of the Metro East mill, for $14.1 billion, the companies said Monday morning. U.S. Steel shareholders still need to vote on the deal, which would not close until the middle of next year.

"Until the transaction closes, which we expect to occur in the second or third quarter of calendar year 2024, U.S. Steel and NSC will continue to operate as two separate companies, and there will be no changes to the business or operating structure as a result of today’s announcement,” a Nippon spokesman said.

News of the deal comes at a turbulent time for steel and ironworkers in Granite City. In the past two years, U.S. Steel has considered selling the mill’s blast furnaces to another company and laid off hundreds of employees.

The sale was announced just days after U.S. Steel and the union representing Granite City workers agreed the company would pay roughly 400 employees for the two months they’d been laid off.

U.S. Steel initially shut down Granite City’s only operational blast furnace on a temporary basis in October. However, a month later, the closing and layoffs became “indefinite.”

Exactly how the sale to Nippon will affect Granite City Works, which employs roughly 1,800 total employees, and the Metro East city remains unclear.

“Until I meet with them and hear from them, I really don't know what to expect,” said Dan Simmons, president of United Steelworkers Local 1899. “I'm disappointed that it isn't one of the other steel companies that we were pushing for.”

Union leaders noted their dissatisfaction in a statement released to members on Monday morning. Despite assurances from David Burritt, CEO of U.S. Steel, the union says it wasn't consulted by either company before the deal was announced.

“This entire process was not conducted as it should have been, but rather in typical USS fashion of keeping the union in the dark, only to inform us after the fact while releasing the news to the media,” wrote Simmons.

David McCall, president of the national union, said in a statement he hoped U.S. Steel would have kept its production domestically owned. He added he would like government regulators to scrutinize the deal.

“To say we’re disappointed in the announced deal between U.S. Steel and Nippon is an understatement, as it demonstrates the same greedy, shortsighted attitude that has guided U.S. Steel for far too long,” McCall said.

Granite City Mayor Mike Parkinson told the St. Louis Post-Dispatch he planned to meet with plant officials, as well as union leaders, on Monday to learn more.

"These workers need to know that the city’s going to do anything and everything we can to get them to invest money into this plant, and to not just look at this plant as a dinosaur,” he said.

Communication between the union and its members will continue as meetings with executive leadership took place on Monday afternoon.

“While the union and its members were welcoming an opportunity to embrace a new owner with a fresh vision for Granite City Works and its unique potential within the corporation, we now find ourselves facing a new owner with the same USS leadership that, frankly, got us here in the first place,” wrote Simmons.

Will Bauer is the Metro East reporter at St. Louis Public Radio.
Lauren Brennecke is a general assignment reporter at St. Louis Public Radio and a recent graduate of Webster University.