USW says Ancora aims to sell mills to fund US Steel revival

The United Steelworkers said an activist investor wants to sell United States Steel Corp.’s state-of-the-art mills to fund sweeping upgrades of union-run facilities that date back to the days of Andrew Carnegie.

US Steel, meanwhile, ratcheted up its criticism of the investor, Ancora Holdings Group, as the American steelmaker pursues completing its $14.1 billion deal with Nippon Steel Corp. before the agreement expires in mid-June.

USW president Dave McCall and District 7 director Mike Millsap wrote in a letter to members that it is scrutinizing Ancora’s plans, and reiterated its opposition to the US Steel-Nippon Steel combination. Ancora, which holds just 1% of US Steel’s shares, has pushed its case to replace the company’s board and install a new chief executive officer to lead a turnaround.

The letter, which was seen by Bloomberg News, highlighted to members that Ancora would sell the company’s Big River assets in Arkansas if its plan succeeds, and invest money from the sale in blast furnaces in Mon Valley, Pennsylvania; Gary, Indiana; and Granite City, Illinois.

A regulatory filing from the activist investor from earlier this month said “rescuing and investing” in the restoration of US Steel’s legacy assets would include up to $1.5 billion at Mon Valley Works, $500 million at Gary Works and $300 million at Granite City.

The USW letter didn’t mention how much money Ancora might expect from sales of the Big River assets. Nippon Steel last year submitted an offer for the Arkansas assets and some mining operations for an enterprise value of $9.2 billion.

The Big River assets produce automotive-grade material in so-called electric arc furnaces, and are viewed as more efficient and lower cost than the company’s legacy integrated plants. The integrated mills, which are union-run plants, require more energy use and a larger work force than the assets in Arkansas.

“Ancora publicly indicated that it intends to sell the Big River facilities, which are and have been a threat to our facilities from day one,” McCall and Millsap wrote. “Our union’s first and only concern has been the long-term viability of our facilities, and with it, ensuring a strong domestic steel industry well into the future.”

McCall said through a spokeswoman that the union recognized from the beginning that Big River Steel poses a threat to its members and to US national security. That echoes comments by former USW President Tom Conway in 2022 that US Steel’s purchase of Big River could mark the beginning of the end for union-run mills.

“We appreciate the positive feedback from the leadership of the USW, which will be a key partner in making US Steel great again,” Ancora said in an emailed statement. “Our slate plans to right current leadership’s wrongs by investing billions in union plants across the Rust Belt.”

The USW letter comes amid a flurry of public statements this week from leadership of US Steel and Nippon Steel. The American company, in a letter Monday to company shareholders, slammed Ancora, claiming some of its board nominees and CEO replacement have financially benefited from ties with competitor Cleveland-Cliffs Inc. It said the activist has no actionable path forward for investors.

It’s unclear what sway the union holds in determining US Steel’s future at this stage, even though it was deeply influential in former President Joe Biden’s decision to block the deal with Nippon Steel. President Donald Trump last month made clear he didn’t want the Japanese company to hold a majority stake in the US firm, but White House officials in recent weeks have met with high-ranking figures from US Steel, Nippon Steel and Ancora.

(By Joe Deaux)