U.S. Steel-Nippon Steel merger: A critical opportunity for Minnesota’s Iron Range

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Minnesota’s Iron Range has long been the bedrock of our state’s economy, providing stability and prosperity for generations. My own connection to this vital region is personal; as a young man, I spent a summer working at the Minntac U.S. Steel taconite facility on the Mesabi Range, witnessing this area’s invaluable contribution to Minnesota. However, recent economic challenges — such as the COVID-19 pandemic and rising inflation — have cast a shadow over the Iron Range, leaving many workers, like my younger self, uncertain about the future of our iron industry.

Yet, amid these challenges, there is a beacon of hope: the proposed $14 billion merger between U.S. Steel (USS) and Nippon Steel. Despite the political noise surrounding this proposal, one fact remains undeniable: This merger offers unprecedented resources, investments and job creation for the Iron Range — an opportunity we cannot overlook.

The positive impact of strategic investments in our region is already evident. In May, U.S. Steel inaugurated a new $150 million production facility in Keewatin, located at the heart of the Iron Range. This facility not only created more than 30 full-time jobs but also introduced state-of-the-art production methods, significantly enhancing efficiency. John Arbogast, a local United Steelworkers (USW) union member, aptly described it as “the most exciting thing that’s happened on the Range since the late ‘70s.” If a $150 million investment can yield such benefits, imagine the transformative potential of investments resulting from a $14 billion transaction.

Nippon Steel has also committed to having good relations with the relevant labor unions in Minnesota and beyond. Not only did the steelmaker pledge to honor all existing collective bargaining agreements with USW — which includes union members working for USS in the Range — but its existing U.S. operations in West Virginia and Pennsylvania have been unionized for decades now. These gestures from Nippon indicate that this deal will not be the same-old story of union-busting mergers.

One uncertainty in this approval process is Gov. Tim Walz’s stance on this deal. His ability to make key decisions for Minnesota has been a topic of debate during his tenure. Whether it was the 2020 riots after the death of George Floyd or the COVID-19 pandemic, his decisions during pivotal moments for the state raised questions from both sides of the aisle.

Today, the USS-Nippon proposal is the next big thing for Minnesota, and Walz should make the right decision by supporting the deal. Such a stance does not diverge much from his past policies as governor. He lauded the opening of U.S. Steel’s Keewatin facility earlier this year, recognizing its crucial role in job creation, boosting productivity and ensuring the longevity of Minnesota’s iron ore industry. In 2021, he wrote to U.S. Steel, urging the company to keep its mines operational and pledging his administration’s support to make it happen.

To avoid the doublespeak that has characterized much of his party’s recent discourse, the governor must endorse the U.S. Steel-Nippon merger. He must recognize that this deal represents a once-in-a-lifetime opportunity to revitalize Minnesota’s iron industry and bring much-needed stability and innovation to this historic region.

Moreover, his vice-presidential candidacy places him in a unique position to influence the outcome of this merger. With the national spotlight on him, Walz has the leverage to moderate the Biden administration’s opposition to this transaction. Even the United Steelworkers, who have been vocal critics of the deal, are now supportive of his vice-presidential bid. Gov. Walz has now become an important figure for the fate of this merger. For the sake of our state and American manufacturing, it is time for him to step up and ensure that there is bipartisan support in Minnesota for this transaction.

As we move deeper into this election year, we must ask ourselves what truly matters: politicizing a business deal for short-term gains, or supporting a transaction that promises long-term stability, innovation and prosperity for our state? The choice is clear. We should allow the market to take its course, approve this merger, and secure a bright future for the Iron Range and all of Minnesota.

Paul Gazelka served as Minnesota Senate majority leader from 2017-2021. He served four terms in the Minnesota Senate and one term in the Minnesota House, representing portions of Cass, Morrison, Todd, and Wadena counties. He sought the Republican nomination for governor in 2022.