Jeff Roberson/AP Photo
United States Steel president and CEO David B. Burritt speaks before President Donald Trump at the U.S. Steel Granite City Works plant, July 26, 2018, in Granite City, Illinois.
Between now and Election Day, as every pollster has attested, Pennsylvania is the center of the political universe. All things Pennsylvanian loom larger than they otherwise would, as their effect on the presidential race could end up either enhancing or dismembering American democracy.
One of those Pennsylvania issues that has been looming large for months has been the projected sale of U.S. Steel (USS)—once the largest, and still one of the most iconic, Pennsylvania-based companies—to Japan’s Nippon Steel. Both Democratic and Republican elected officials have opposed that sale, for a disparate range of reasons. To Trump and the MAGAnauts, the very names of the two companies suggested that America would be submitting to a foreign power if the Nippon sale went through. To union-friendly Democrats, the rejection of a previous bid from Cleveland-Cliffs—an American steelmaker that has good relations with its unions and makes a decent profit to boot—was emblematic of U.S. Steel CEO David Burritt’s unabashed union-loathing, making his effort to unload the company to Nippon a deliberate affront to USS’s employees.
Though the Steelworkers’ contract with USS required the company to inform the union of ongoing negotiations with possible buyers, USS kept its dealings with Nippon secret until it announced its desire to accept Nippon’s offer. Once it made that offer public, the union announced its opposition, as Nippon has no history of support for U.S. organized labor, and offered no guarantees, once the Steelworkers contract expired in 2026, that it would not shift production to USS’s non-union plant in Arkansas or even to Japan. (That Arkansas mill uses a different kind of production technique that is less job- and energy-intensive but also currently unable to create the kind of high-strength steel used in vehicles and other critical sectors that the U.S. is also trying to resurrect.)
For those reasons, as well as the strategic need to preserve a domestic steel industry, the Biden administration made clear earlier this month that it would compel USS to reject Nippon’s offer, through the ruling of the Committee on Foreign Investment in the U.S. (CFIUS), an interdepartmental body chaired by Treasury Secretary Janet Yellen.
Since then, however, Burritt has vowed to close USS’s Pennsylvania mills, throwing more than 10,000 steelworkers out of a job, and shutter the company’s Pittsburgh headquarters if he can’t get his way. To this display of sticks, Nippon has added carrots: a pledge to invest more in the company’s venerable Pittsburgh-area plants if the deal is permitted to go through.
Burritt’s Godzilla act—a colossus who’d level Pittsburgh if he’s denied a more lucrative deal for himself and sundry large shareholders—comes straight out of U.S. management’s union-busting playbook, which instructs corporate executives to threaten to shut down the worksite and move to some cheaper locale (Arkansas, Mexico, China) if their workers are seeking to form a union, or endeavoring to secure a raise beyond what management would like to pay. Burritt’s innovation is to employ these classic worker intimidation tactics in the context of a proposed sale.
The reason management reverts so often to worker intimidation, of course, is that it usually works. The threat of moving work abroad, or to our own non-union South, is one reason why American workers’ wages haven’t risen all that much since the late 1970s. And since he’s threatened to flatten Pittsburgh, Burritt has clearly managed to strike fear in some Pittsburgh hearts, as some local USS employees and elected officials have indicated that the better part of valor might be to let the Nippon sale go through after all, rather than risk the shuttering of Pittsburgh’s steelmaking. Enough fear, apparently, that some Democrats who previously opposed the sale have wondered whether that stance won’t cost more votes than it would have gained before Burritt donned his Godzilla suit. Enough fear that the Biden administration reportedly considered it politically prudent to delay its ruling on the sale, which had been expected to come perhaps as early as this week, until after the election.
That’s not the only possible response, however. Burritt’s threats encapsulate everything that has soured much of the American public on my-way-or-the-highway CEOs, and, more broadly, on the kind of anti-stakeholder capitalism at the heart of the corporate flight that destroyed so much of the industrial Midwest, and so much of the Pennsylvania economy. There’s another possible response, one of genuine progressive-populist outrage. Pennsylvania’s Democratic Sen. Bob Casey, currently embroiled in a tight re-election battle with out-of-state Republican hedge fund operator David McCormick, issued a version of that in his reaction to Burritt’s Godzilla act:
“David Burritt’s threats to abandon the very community that built U.S. Steel is a slap in the face to the Steelworkers whose skill and work ethic make the company successful and to the people of Southwestern Pennsylvania whose livelihoods rely on the steel industry.”
They are indeed.
It was Democrats’ acquiescence to (or worse, support for) this kind of conduct that led to the passage of NAFTA and permanent normal trade relations with China. Those happen to be primary reasons why formerly blue-wall states like Michigan, Wisconsin, and Pennsylvania are now in play. Bob Casey understands that, and I think Joe Biden and Kamala Harris do as well. When a self-interested CEO threatens to eviscerate Pittsburgh, calling him out is both good politics and good policy. And after all, Pennsylvania is the center of the universe.
