At first glance, the growing controversy over Nippon Steel’s proposed $14.9 billion takeover of U.S. Steel would appear to be more of an east coast issue, something that wouldn’t have a major impact on the regional economies of Oklahoma and Arkansas.
However, that’s not the case. The issue plays into U.S. Steel’s move in recent years to invest billions of dollars in its Big River Steel Works plant in Osceola, Arkansas. As the Biden administration fights Nippon over the proposed takeover and is supported by Vice President Kamala Harris as well as former President Donald Trump, there is speculation if the takeover is killed, U.S. Steel might move its headquarters to the South. Maybe even Arkansas?
The deal remains under investigation by the Committee on Foreign Investment in the U.S. and so far, the committee has yet to make a recommendation to the White House. If indeed the proposed buyout by Nippon Steel is swatted down, here’s what it might mean for Arkansas.
In an interview with the Wall Street Journal, U.S. Steel CEO David Burritt said if the deal fails, then his company will close more older mills and possible shift more production to mills in northeast Arkansas. He added that it might also result in U.S. Steel moving its headquarters out of Pittsburgh to somewhere in the South. While Burritt didn’t hint where that might be, his comments resulted in speculation—could a new U.S. Steel headquarters be in northeast Arkansas?
The controversy comes at a time when a large number of former steel plants sit empty across the U.S., shut down in the past decades, resulting in increased steel manufacturing overseas. It took decades for the U.S. business world to transform away from manufacturing toward information and finance. For example, in 1991, U.S. Steel was removed after 90 years in the Dow Jones Industrial Average, considered the benchmark of the nation’s 30 most important companies.
While the Nippon and U.S. Steel deal has become a political issue, the U.S. also must face the fact that the largest steel maker in the world is now China. In recent years, stories arose of China’s acquisition of old and discarded rail tracks in the U.S. and shipping them to the Communist country.
As CNN reported in a December 2023 article, “And the US steel industry is a shell of its former self, with no company among the 10 largest steel producers around the globe.”