Portside

On July 6, 1892, America’s most profitable corporation sent 300 Pinkerton agents to overpower the workers at its Homestead, Pennsylvania, steel mill, all 3,800 of whom the company had fired four days before as a way to break their union. In the ensuing battle, seven workers and three Pinkertons were killed.

That corporation—Carnegie Steel—was a marvel of its time, dominating America’s huge and growing steel industry. In 1901, J.P. Morgan worked out a merger between Carnegie and other leading steelmakers, which entailed paying a then-unheard-of $480 million for Carnegie’s stock (half of which went to Andrew Carnegie himself). The newly created behemoth was named United States Steel.

In 1937, workers managed to unionize U.S. Steel under the CIO’s United Steelworkers, since which the company’s labor relations have oscillated between OK and pretty damn bad. But until yesterday, its workers hadn’t experienced an attack as sweeping as that of 1892.

Yesterday, the Biden administration made clear that it would reject Nippon Steel’s offer to buy U.S. Steel on national-security grounds. (Vice President Harris came out against the deal as well.) The Pittsburgh-based company’s workers had been blindsided by Nippon’s bid and U.S. Steel’s determination to accept it; the Steelworkers’ contract with U.S. Steel required the company to keep the union apprised of such dealings, which the company had deliberately not done. Instead, it had rejected a previous offer from a domestic company, Cleveland-Cliffs, whose workers, like those at U.S. Steel, were members of the United Steelworkers. And while Nippon promised it would honor the current contract under which U.S. Steel employees work, it made no effort to contractually work with its unionized workers once the current contract expired.

As news of the Biden administration’s rejection of the Nippon bid became public yesterday, U.S. Steel CEO David Burritt lashed out at the union, threatening to close down the company’s last remaining Pittsburgh mill, transfer the work to its new non-union mill in Arkansas, and also move its headquarters, which has anchored Pittsburgh’s business community since 1901, to the non-union South as well. (This last threat appears to be Burritt’s way of retaliating against Pennsylvania Gov. Josh Shapiro, who, like virtually every political leader in the region, opposed the pending sale to Nippon.)

Vowing to close his company’s unionized facilities, Burritt appears to be guided by the same anti-union loathing that led Carnegie and his company’s manager in 1892, Henry Clay Frick, to fire all their workers and call in the Pinkertons. His argument that U.S. Steel is hampered by having to abide by contracts with the union doesn’t stand up to scrutiny: From the day he became CEO in May of 2017 until the day before the company received its first offer to be purchased (in this case, by Cleveland-Cliffs) in May of this year, U.S. Steel’s share value rose by a bare 8 percent, while the share value of Cleveland-Cliffs—all of whose mills are unionized under comparable contracts to those at U.S. Steel—rose by 130 percent. That makes a fairly strong case that this difference in company valuation is not due to any "constraints" that the presence of a union supposedly imposes, but rather to the policies and skills of management.

Does rejecting Nippon’s bid on the grounds of national security stand up to scrutiny? That depends, I suppose, on your definition of national security. If national security ultimately depends on having a working class that is financially secure, that isn’t at the mercy of globalized capitalism, that has a real stake in American prosperity, and that isn’t reduced to a dangerous lumpen status by Wall Street maneuvering, then yes—having a workforce whose interests and rights are secured by union contracts is actually a linchpin of long-term national security. In its absence, as we’ve already begun to see, the internal threats to American security and American democracy can readily metastasize.