Board of Arbitration Rules in Favor of U. S. Steel, Affirming Transaction with Nippon Steel
25 September 2024 - 5:19PM
Business Wire
U. S. Steel has satisfied the successorship
obligations in the Basic Labor Agreement (BLA) with the United
Steelworkers (USW)
All BLA issues between U. S. Steel and USW are
now resolved
No further action is necessary under the BLA
for Nippon Steel to acquire U. S. Steel and assume all USW
agreements in line with its commitments
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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