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--:-- Host (Jessica Mendoza): Welcome to The Journal, our show about money, business, and power. I'm Jessica Mendoza.
--:-- Host (Jessica Mendoza): It's Thursday, September 12th. In this presidential election, the two candidates have rarely found common ground. But as our colleague Chris Marr reports, there is one issue that unites them.
--:-- Chris Marr: Yeah, so it's pretty funny. I mean, I think there's almost nothing that these two candidates agree on in terms of policy right now. Right. But oddly enough, there is one issue that Kamala Harris and Donald Trump agree on. And it has to do with this company in Pittsburgh. And what company is that?
--:-- Chris Marr: So the company I'm talking about is U.S. Steel. U.S. Steel. U.S. Steel. U.S. Steel. Iconic Pittsburgh-based company, U.S. Steel.
--:-- Host (Jessica Mendoza): President Biden is preparing to block the sale of U.S. Steel to a Japanese company. Kamala Harris and Donald Trump are both against this deal, which is selling U.S. Steel to a Japanese steelmaker for billions of dollars.
--:-- Chris Marr: President Biden actually came out and said that he would block the deal. American-owned, American-operated by American Union steelworkers, the best in the world. And that's going to happen, I promise you.
--:-- Host (Jessica Mendoza): U.S. Steel, the storied American company, has struck a deal with an overseas buyer, a deal national politicians have united against. But in Pittsburgh, Pennsylvania and surrounding towns, the home of U.S. Steel? There's actually a disconnect between what the national candidates are saying and what some of the local elected officials are saying in and around Pittsburgh when it comes to this U.S. Steel deal.
--:-- Chris Marr: When I spoke to people on the ground here, local politicians, workers, people who live in these towns, it's a much more fraught and complex issue.
--:-- Host (Jessica Mendoza): How would you feel if Biden did come out and block the deal?
--:-- Chris Marr: Pissed. But I would ask, Mr. President, tell me one person in your administration that spoke to any of these workers that will be affected. Just give me one name of any of the people that are going to lose their homes, their livelihood. Give me one name that you've spoken to. That's what I'd say.
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--:-- Host (Jessica Mendoza): Welcome back to The Journal. Coming up on the show, the fight over U.S. steel and the community caught in the middle.
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--:-- Host (Jessica Mendoza): Long before Apple and Amazon, before Walmart and the reign of General Motors, there was U.S. Steel, the first-ever billion-dollar company. These were the steel plants of America.
--:-- Chris Marr: In America, steel is the backbone of business. U.S. Steel arguably built industrial America. In its heyday, the company employed about 340,000 workers. And its imprint was everywhere, from refrigerators to rail cars to the U.N. building and tanks during World War II.
--:-- Host (Jessica Mendoza): Steel from the company was used in the San Francisco Bay Bridge. It was used in the major bridges in New York City, the Tappan Zee, the Veranzano Narrows, and the Henry Hudson Bridges. And, you know, at one point, the company controlled two-thirds of all steel production in the United States.
--:-- Chris Marr: The industrial beating heart of U.S. steel was in Pittsburgh, Pennsylvania. The company made Pittsburgh synonymous with Steel Town.
--:-- Host (Jessica Mendoza): Just ask this guy. A local Pittsburghian? Pittsburgher? I could possibly be an adopted Yinzer. A Yinzer? It's a Pittsburgher.
--:-- Chris Marr: Our colleague Chris Marr has been an adopted Yinzer for almost 20 years. So if you could name like five things that you associate with Pittsburgh, what would they be?
--:-- Chris Marr: I think probably some of the top ones for me and other people would be the Pittsburgh Steelers for number one. Pittsburgh Penguins, the hockey team. I'd probably have to add in Primanti Brothers sandwiches. And then I think that U.S. Steel would be pretty close to the top as well. So sports, sports and industry, basically.
--:-- Host (Jessica Mendoza): It's hard to ignore how deeply ingrained steel is in Chris's adopted hometown. If you drive along the rivers or you walk ride your bike, you can see places where there were steel mills. You can still see the railroad sidings. You know, it's present sometimes in the smell in the air.
--:-- Chris Marr: It's definitely present when I take my kids to Kennywood, the amusement park, because you have one side of the river, you've got roller coasters rising above the trees. On the other side, you've got the Edgar Thompson steel mill, which is still operating after more than 100 years and steam coming up out of the buildings.
--:-- Host (Jessica Mendoza): How important is U.S. steel to Pittsburgh? I mean, in terms of the city's identity, it's still incredibly important. Economically, you know, as a driver of revenue in the city, it's less important than it once was.
--:-- Chris Marr: Less important because for decades, like so much manufacturing in the United States, U.S. steel has been in decline. Throughout the 1970s and 80s, competition from home and abroad began to eat into the company's revenues. Advancements in technology also meant that the company needed fewer workers.
--:-- Host (Jessica Mendoza): So what happened was just massive, massive job losses. I mean, this was a traumatic period for the region here. If you go into this area called the Mon Valley, which is just south of Pittsburgh, you can see towns that are still struggling.
--:-- Chris Marr: Over time, U.S. Steel's global workforce shrank to about 21,000 workers, just 6% of where it was at its peak. The company was facing a cash crunch. And last year, other companies started expressing interest in buying U.S. Steel, including one from Japan called Nippon Steel.
--:-- Host (Jessica Mendoza): And in December? U.S. Steel has agreed to sell the company overseas for nearly $15 billion. Nippon Steel Corporation out of Japan announced minutes ago that it's acquiring U.S. steel.
--:-- Chris Marr: The company saying it wants to ensure the plant remains viable and provides jobs for future generations of steel workers in Pennsylvania. Nippon Steel says they want to expand in the U.S. market and they want to invest in U.S. steel's facilities.
--:-- Host (Jessica Mendoza): And so what did you hear from people that you spoke to in the area?
--:-- Chris Marr: Yeah, I mean, I think it was kind of shocking to a lot of people to hear that U.S. steel could be sold. How are you, sir? What can I do for you?
--:-- [Audio clip of a conversation with a local resident]
--:-- Host (Jessica Mendoza): Hi, I'm a reporter with the Wall Street Journal. I live in Pittsburgh. To have a foreign steelmaker come in also is a bit, you know, it's a little bit different for especially a company that is such an iconic American company.
--:-- Chris Marr: Even still, some of the people Chris spoke with said they weren't necessarily against the deal. Like Al Boss, who works at a local shop.
--:-- [Audio clip of a conversation with Al Boss]
--:-- Host (Jessica Mendoza): Some people might be a little concerned that another country has control of our steel here. And I'm not sure if that is going to be the case. You know, here, I'm sure that we have American-owned companies in other countries, you know. So why are we stopping another country from business here?
--:-- Chris Marr: Yeah. One of the reasons people in the region support the deal is that the company Brass says it's necessary to preserve jobs. The CEO of U.S. Steel recently said that if this deal with Nippon Steel doesn't go through, that U.S. Steel could close down the steel plants outside Pittsburgh in the Mon Valley, and that, you know, they may actually have to move the headquarters out of Pittsburgh.
--:-- Host (Jessica Mendoza): Some people think it's a bluff, but others think the company just, they're going to end up pulling out. For its part, Nippon Steel says it won't lay off workers or shut our plants through 2026. The company has also pledged to invest over a billion dollars in the region to plants in the Mon Valley outside Pittsburgh.
--:-- Chris Marr: But do we really know whether or not jobs will be lost, like if the deal goes through or if it doesn't go through? You know, the way that the workers I spoke to are looking at this, there is uncertainty, you know, in either scenario.
--:-- Host (Jessica Mendoza): So if Nippon comes in, they want to definitely believe that the investment will come through and the jobs will be saved, you know, potentially even for generations to come. But at the same time, you know, there are people who are skeptical and think, you know, we can't say what's going to happen a few years down the line after this current contract is up.
--:-- Chris Marr: So really, there's concern right at the moment. The leadership of the powerful steelworkers union remains staunchly against the deal. The union worries that Nippon Steel won't honor its promises or union contracts, which could pave the way for eventual plant closures and layoffs.
--:-- Host (Jessica Mendoza): They've also alleged that both Nippon Steel and U.S. Steel kept the union in the dark during negotiations. Here's United Steelworkers President Dave McCall talking to CNBC.
--:-- [Audio clip of Dave McCall's interview]
--:-- Host (Jessica Mendoza): What makes it so insincere is they make a statement there'll be no layoffs, there'll be no plant closures. But in our discussions with them, they say there'll be no plant closures, there'll be no layoffs unless there's a business plan change. Well, that's not worth the water that it's held in.
--:-- Chris Marr: I mean, it's almost been a year at this point since the deal was announced. Has anything changed for folks on the ground?
--:-- Host (Jessica Mendoza): So from what I'm hearing is that, you know, some people's views are evolving. You know, it seems like a growing number of workers and union members of the plant that among the rank and file many of them are coming around to the idea that a Nippon sale would actually be better for the Pittsburgh region You know it be better for the communities it be better for the plants and it be better ultimately for you know these workers and their families
--:-- Host (Jessica Mendoza): This debate over the deal has split the Pittsburgh region. But the people Chris met also know that this deal is about more than just one city and one company. It's become a major issue in national politics.
--:-- Chris Marr: It is, you know, it is political season. And it is, you know, we are going into elections here in about two months. Yeah. Yeah. That's what it is. Key. Yep. Swing state. That's after the break.
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--:-- Host (Jessica Mendoza): Steel is an important commodity for American infrastructure and national security. And so there's more scrutiny on the potential sale of U.S. steel to a foreign buyer. The Biden administration has to approve this deal if it's to move forward. Where does the administration stand on the deal right now?
--:-- Chris Marr: So the deal right now is undergoing a national security review, but President Biden has really been outspoken in saying that U.S. Steel should remain a domestically owned and operated steel company.
--:-- Host (Jessica Mendoza): President Joe Biden reportedly plans to block the deal. He cited national security concerns, as well as a desire to safeguard the domestic supply of steel.
--:-- Chris Marr: Both former President Trump and Vice President Harris have also said they oppose the deal. U.S. Steel is being bought by Japan. It's so terrible. But yeah, we want to bring jobs back to the country. U.S. Steel is an historic American company. And it is vital for our nation to maintain strong American steel companies.
--:-- Host (Jessica Mendoza): A lot of other politicians agree with the sentiment, including everyone from Republican vice presidential candidate J.D. Vance to both Democratic senators of Pennsylvania and the state's Democratic governor.
--:-- Chris Marr: What specifically have these politicians said about why they oppose the deal?
--:-- Host (Jessica Mendoza): You know, I think what comes out when I hear them speak is that they're sort of signaling that they are supporting the American worker. They're supporting working class people, especially, you know, working class voters, really. And they want voters to believe that they want to support domestic manufacturing.
--:-- Chris Marr: They want to support corporations in the United States, but, you know, even more the workers at those companies.
--:-- Host (Jessica Mendoza): Pittsburgh, Pennsylvania, is in one of the swingiest areas of one of the most important swing states this election. And the Steelworkers Union is a coveted endorsement with a powerful organizing arm.
--:-- Chris Marr: But local politicians in the region aren't lining up as neatly as the national ones. I spoke to some elected officials. I talked to all three mayors from the towns where the U.S. steel has its plants. And they're all supportive, too.
--:-- Host (Jessica Mendoza): You know, as long as Nippon Steel follows through on its pledge to invest in the region, they're in favor of the deal.
--:-- Chris Marr: And, you know, I spoke to Rich Latanzi, who is the mayor of Clareton. And he actually was a steelworker for 30 years.
--:-- [Audio clip of Chris Marr's conversation with Rich Latanzi]
--:-- Host (Jessica Mendoza): Well, there we go again with talk. He said that, you know, if this Claritin plant goes away, it's going to wipe us off the map. People that just work there or support the process would be out of work. Those people that don't have money, it would be devastating to the economy and to Pennsylvania.
--:-- Chris Marr: It would take us off the map. And I just think that we would be in some kind of serious depression. I think Clare would be somebody in the water that would have trouble swimming with no left guards
--:-- Host (Jessica Mendoza): So he got a really unique perspective on you know seeing this from a worker perspective and also from an elected official and someone who looking out for you know the people in his community
--:-- Chris Marr: And then on the other side, was there anyone in particular you met who made a really strong case about why this deal should not go through?
--:-- Host (Jessica Mendoza): Yeah, so I spoke to a worker named Don Furco. He works at the Clareton plant also. And I met him one day just as he was coming out of the gate of the plant.
--:-- [Audio clip of Chris Marr's conversation with Don Furco]
--:-- Host (Jessica Mendoza): Don told Chris that he doesn't trust Nippon's deal, in part because of how secretive he felt the negotiations were. And he worried they might not honor the union's contract.
--:-- Chris Marr: But Don also acknowledged his colleagues are divided. How do you think it breaks down among the membership or guys at the plant?
--:-- Host (Jessica Mendoza): I think that it's a mixed bag. You know, I would probably say it might even be close to 50-50. I think that there are a lot of members who are concerned about losing their job, So they are more inclined to go and back the deal.
--:-- Chris Marr: Some workers told Chris they don't buy the whole national security argument. After all, they say Japan is a U.S. ally.
--:-- Host (Jessica Mendoza): Did you get a sense from them about whether this was a voting issue for them? Is that something that would sway them one way or another come Election Day?
--:-- Chris Marr: Yeah, you know, I did ask people, does the position of this candidate affect how you're going to vote? And I don't know if this is surprising or not, but they pretty much all said, no, it's not going to change how I'm voting.
--:-- Host (Jessica Mendoza): There's a whole bunch of other issues that are concerning to me. And I see this as political rhetoric. And so I thought that was kind of interesting, you know, because it's signaled to me that maybe the politicians are intending an effect, but it may not be having that effect among voters, actually.
--:-- Chris Marr: I talked to Chris Kelly, and he's the mayor of West Mifflin, and that's where one of these steel plants is located called the Irvin Works.
--:-- [Audio clip of Chris Marr's conversation with Chris Kelly]
--:-- Host (Jessica Mendoza): What do you think about all these politicians jumping in now?
--:-- Chris Kelly: I think that it's a situation that is an opportunistic time for them to do so. And I think the amount of airtime this is generating and knowing that Pennsylvania is such a swing state and Pittsburgh is a catalyst of that, that they're paying attention.
--:-- Host (Jessica Mendoza): Like, you know what? Nobody did speak to the local guy. Nobody spoke to the families that were being affected.
--:-- Chris Kelly: Chris spoke to Mayor Kelly one evening at the mayor's house out on the driveway.
--:-- Host (Jessica Mendoza): What has steel meant to the city of Pittsburgh and the region?
--:-- Chris Kelly: Oh, man. Steel was it. I asked him, you know, what was it like back in the days when those plants were really churning out steel?
--:-- Host (Jessica Mendoza): And he told me that, you know, one of the memories he had was of sleeping outside and waking up in the morning. I mean, we'd sleep out at night in Homestead and you'd wake up with glitter all over your face from the blast furnace and everything.
--:-- Chris Kelly: But that was part of life. You know, some people might call it grit or soot, but he had a more positive kind of connection to it.
--:-- Host (Jessica Mendoza): But whatever happens with this deal, right, whether or not it goes through, are we looking at the end of Steel Town? Or have we already said goodbye?
--:-- Chris Kelly: You know, some of the city's connection to the steel industry at this point is nostalgic, but it's not for the people who work there. I'm going to say that too, or the communities where these plants are located. For them, it's all about earning a living, you know, keeping their families healthy and prospering.
--:-- Host (Jessica Mendoza): If you're standing in downtown Pittsburgh looking up at the U.S. Steel Tower, the tallest building in Pittsburgh's skyline, it's built from U.S. Steel made steel. But today it has UPMC across the top, which is the name of the biggest health care system in the region.
--:-- Host (Jessica Mendoza): So that's also a very real world example of the shift that has happened in the city. Away from steel, but also the enduring legacy of the company.
--:-- Host (Jessica Mendoza): So I think probably a lot of Pittsburgh is waiting to see how this is all going to unfold.
--:-- Host (Jessica Mendoza): That's all for today, Thursday, September 12th. The Journal is a co-production of Spotify and The Wall Street Journal. Additional reporting in this episode from Bob Tita. Thanks for listening. See you tomorrow.
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--:-- Host (Jessica Mendoza): Every minute your finance team spends wrestling with data is a minute lost. Insight Software's AI-powered insights instantly move you from complexity to clarity. Automated analysis, real-time reporting, strategic recommendations, all at your fingertips.
--:-- Host (Jessica Mendoza): Transform how your finance team works and watch your business grow. Stop wasting time. Start making smarter decisions. Learn more at insightsoftware.com. Bye.
