LYNDORA, Pennsylvania — Lourenco Goncalves, the CEO of steelmaker Cleveland-Cliffs, said he wants to make a new bid to acquire U.S. Steel, calling his pitch an “all-American solution” to save the corporation.
At a nearly hour-long press conference Monday at the company’s facility in Butler, Pennsylvania, Goncalves said he would make Pittsburgh the headquarters of the new company, relocating Cleveland-Cliffs to the city and making it a subsidy of U.S. Steel, which would keep its iconic name.
After blocking the sale of U.S. Steel to Nippon Steel at the beginning of the year, the Biden administration extended the deadline for the Japanese steelmaker to abandon plans to acquire U.S. Steel to mid-June.
In reaction, U.S. Steel released a statement saying it was pleased with President Joe Biden’s decision.
“We look forward to completing the transaction, which secures the best future for the American steel industry and all our stakeholders,” it said.
News of the extension saw shares of U.S. Steel rise 6% in trading Monday.
During the news conference, Goncalves said the only way he could mount a bid for the purchase was if U.S. Steel and Nippon Steel walked away from their deal.
“If I present an offer today, they can’t take it. So the very first thing that needs to happen, the merger agreement needs to be abandoned,” he said.
Goncalves praised local elected officials, including Rep. Chris Deluzio (D-PA), Sens. John Fetterman (D-PA) and Dave McCormick (R-PA), and Gov. Josh Shapiro (D-PA). Goncalves said each leader recognized the challenges of a foreign company owning one of the U.S.’s oldest companies.
Shapiro, who worked with Goncalves last spring to save the Butler Works plant from shutting down because of a Biden energy department rule, said in a statement that throughout the entire process, he and his administration have been engaged in intensive conversations with all parties involved in the future of U.S. Steel.
Shapiro has said for months his focus has always been on protecting Pennsylvania workers and ensuring that the future of U.S. steelmaking takes place in the Commonwealth.
Shapiro spokesman Manuel Bonder said in a statement that Goncalves must make an offer before the governor gets involved.
“In conversations with the Governor, he has made meaningful commitments to Pennsylvania,” Bonder said, “including moving his headquarters to Pittsburgh. Before the Governor would even consider endorsing any potential deal, Cleveland-Cliffs needs to make a formal bid to buy U.S. Steel and present specific details on what it will do to protect Pennsylvania jobs for the long term.”
Shapiro has said repeatedly throughout the process that he expects any buyer to demonstrate strong commitments to capital investment at the Mon Valley Works, keeping the headquarters in Pittsburgh, and protecting and growing jobs throughout western Pennsylvania.
During the press conference, Goncalves did not elaborate on reports that he would partner in his bid with North Carolina-based Nucor for the purchase.
Once the largest company in the world that culturally and economically changed the landscape, not just of western Pennsylvania, U.S. Steel has faded considerably over the past few decades, feeling the pinch from all sides, including automation, its own underinvestment in upgrades and technology, and the flood of cheap foreign steel into the U.S. marketplace.
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Forty years ago, steel was king up and down the Ohio and Mon valleys in towns and cities such as Shenango, Wheeling, Weirton, Youngstown, McKeesport, Johnstown, Aliquippa, and Pittsburgh, to name a few. Cities and factory towns were literally built up around them, including churches, schools, machine shops, restaurants, and barber shops. When the plants died, many of the towns did too. Some came back, and some, such as the U.S. Steel plants in Braddock and Clairton, have barely held on to the diminished capacity at their plants.
President-elect Donald Trump has said in numerous interviews that he supports a U.S. company owning U.S. Steel, as have Fetterman, McCormick, and Deluzio. This matter looks to be a top priority for them as the new administration is sworn in next week.