Impact of U.S. Steel and Nippon Steel deal on Gary, Indiana plant and the Midwest

CHICAGO (WLS) — President Donald Trump recently announced a partnership between U.S. Steel and Nippon Steel.

There have been reports stating that Nippon is planning substantial investments in U.S. Steel facilities across various states such as Pennsylvania, Alabama, Arkansas, Minnesota, and Indiana. This investment will include upgrading U.S. Steel’s main manufacturing plant situated by Lake Michigan in Gary, Indiana.

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Gary Mayor Eddie Melton says during discussions a little over a year ago, the investment in Gary was going to be roughly $300 million.

Initially, a $300 million investment figure was discussed but following negotiations, it was increased to $1 billion. This significant amount will be utilized for refurbishing the primary blast furnace, particularly Number 14, which happens to be the largest blast furnace operated by U.S. Steel. This upgrade will extend the lifespan of steel production at this particular facility. Moreover, the billion-dollar investment will span over a decade and cover the enhancement of three more blast furnaces in Gary, leading to a boost in employment opportunities and steel output for the entire nation,” Melton mentioned.

Anthony Sindone is the director of the Center for Economic Education and Research at Indiana University Northwest.

The substantial infusion of capital is akin to a rising tide that lifts all boats. While the improvements may not be uniform across all areas and there may not be a standardized 10% production increase for each company, overall, there is optimism that the Midwest region will witness a rise in the overall value of steel production in the long term,” Sindone expressed.

When it comes to labor implications and the jobs at U.S. Steel in Gary, Melton says, “As the child of a steelworker, this was very important to me in terms of what does this deal mean to the current workers and the future workforce of U.S. Steel.”

Melton says currently, about 4,000 people are employed at the Gary Works plant.

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“I was skeptical of the entire deal in the beginning just like many folks, some still are. Now, with this partnership this is guaranteed a certain level of comfort for workers. A $5,000 signing bonus for all [current] U.S. Steel workers, is something that Nippon has guaranteed. Insuring there are no plant closures across the U.S. Steel footprint throughout the United States. And just honoring the existing contract that the steelworkers have knowing that they’re coming up on renegotiation,” Melton said.

Former President Joe Biden rejected this deal involving a U.S. company and a Japanese company over national security concerns.

Sindone says he’s not overly concerned.

“I’m old enough to remember back in the 70s, when we were so concerned about Japanese companies buying Rockefeller Center in New York. ‘Oh my gosh, New York real estate is going to go to Japan.’ No, it isn’t. It’s still there, right? Gary Works is still going to be there. The plant in Pittsburgh is still going to be there. OK. It’s a matter of how those plants are going to be operated. Now, as far as strategic steel production that’s used primarily by the military, or by special construction entities, that can be controlled by the board and my the management, I believe, of Nippon U.S. Steel,” Sindone said.