U.S. Steel Edgar Thomson Works in February 2023. (Photo by Quinn Glabicki/PublicSource)
Analysis: The failure of Nippon Steel’s acquisition of its Pittsburgh-based competitor U.S. Steel reminds us that Pittsburgh’s steel communities still struggle with their past.
“PublicSource is an independent nonprofit newsroom serving the Pittsburgh region. Sign up for our free newsletters.”
Editor’s note: In the wake of President Joe Biden’s decision to block the sale of U.S. Steel to Japan-based Nippon Steel, many regional leaders voiced reactions. Allegheny Conference on Community Development CEO Stefani Pashman wrote: “Nippon made specific commitments that should have been embraced – maintaining a regional headquarters, investing in upgrading facilities and growing jobs in the Mon Valley. Choosing to walk down an uncertain path when a viable and highly beneficial deal is on the table is the wrong decision by the Biden administration.”
Allegheny County Executive Sara Innamorato wrote that “finding a path forward for steel operations in the Mon Valley is an important part of a thriving Allegheny County.”
U.S. Steel and Nippon announced that they were “dismayed” at a decision “corrupted by politics” and would “take all appropriate action to protect our legal rights.” The statement called Nippon “the only partner both willing and able to make the necessary investments — including at least $1 billion to Mon Valley Works.”
Equity-focused 1Hood Power noted the effects on the region of industrial pollution, which it urged “must remain in focus is the health and safety of the citizens of our Commonwealth.”
When the Nippon’s $14 billion offer became public in late 2023, regional economist Christopher Briem, of the University of Pittsburgh’s University Center for Social and Urban Research, wrote in an essay for PublicSource that “the painful truth is that U.S. Steel, long the dominant local player in the industry, has never had anywhere near the commitment to Pittsburgh as Pittsburgh had to the corporation.”
Here’s his analysis of the meaning of today’s news for the region.
In the fall of 1952, there were more than 400,000 manufacturing jobs across Southwestern Pennsylvania, directly employing literally four out of every 10 workers in the region. The majority of those jobs were connected directly or indirectly with the production of steel, an industry which had begun to concentrate in the region a century earlier.
When you consider how many additional local jobs were dependent on the purchases of steel firms, or the spending of payroll of steel households, you begin to understand the deep connections between the behemoth industry and the many communities of the region. An indelible belief was that steel would always be the core of the region’s economy — yet it was a belief that was already fraught.
The reality was that steel production had been moving away from Pittsburgh from the earliest part of the 20th century. That decline was masked by tectonic events far beyond the region. The onset of the Great Depression arrested the evolution of the industry, followed closely by the onset of World War II and the artificial demand for steel that brought investment and growth to Pittsburgh.
At its peak in the 1950s, the American steel industry’s players believed they dominated the world, in no small part because most of their major competitors were on the losing end of a cataclysmic war that left their production capacity decimated. It was a hubris that would eventually come home to roost with a vengeance.
American steel companies, and in particular U.S. Steel, were slow to adopt new technologies. Yet by the 1950s, Japanese and European production began to rebuild with new basic oxygen furnaces while older open hearth furnaces were far more common even in new investment here. Competition expanded in the 1960s as new steel minimills began to appear, the new plants using electric arc furnace technology that was mostly ignored by legacy steel firms concentrated here.
By the 1980s, Pittsburgh-area steel had competition from both domestic and foreign producers. By the time local industries realized their plight, it was in many ways too late.
Today, manufacturing accounts for just over 85,000 jobs in the region — roughly 1 in 14 Pittsburgh-region jobs — and only a small fraction of the region’s remaining manufacturing jobs are involved in the production of steel in any way.
From sledgehammers to painful truths
There was incredible cognitive dissonance in the recent wave of advertisements showing the coalition of local union workers and politicians advocating for the acquisition of U.S. Steel by Nippon Steel. In the 1980s, it would not have been uncommon to see angry workers taking a sledgehammer to a recently imported Japanese car blamed for job losses here and elsewhere. Locally, imports of foreign steel were inordinately blamed for the contraction of American jobs across heavy industries, especially those jobs concentrated in the Mon Valley.
The truth was much harder to accept. American steel had failed to make the essential investments to remain competitive and Pittsburgh had long since lost its role as an ideal location for making steel. The concentrated job destruction of the 1980s was the end, not the beginning, of a long decline of steel production in the Pittsburgh area.
The 1980s is now four decades in the past, and yet local communities still look to steel for their economic prosperity.
At the beginning of 2025, local and national headlines are again dominated by the impact of steel in Pittsburgh. In a strange irony, even as national union leaders opposed the potential acquisition of U.S. Steel by Nippon Steel, some local workers and politicians vocally advocated for the deal. Whether Nippon Steel provided a better prospect for critical reinvestment may remain an unknown counterfactual, but local support for the deal was based on a belief that new investment would extend local steel production into the future.
The painful truth is that the communities that have retained the most steel production have deferred the beginning of any postindustrial transformation and are today among the poorest communities in the nation. Poverty rates in Braddock and Clairton and several of the adjacent municipalities reach or exceed 30% even today.
That local leaders see the extension of steel production as important is a testament to how a generation of local and national policies have failed at facilitating meaningful change. The United States has rarely sustained any form of the structural adjustment policies common in other nations to catalyze regional transformation. Instead, we have done almost the opposite and left not just regions, but our hyper-fragmented communities to fend for themselves in the face of economic shifts far beyond their control.
So it may make sense that some local leaders cling to legacy steel production as a pillar of economic stability, but it is a self-defeating vision for the future. Local efforts to assist the Mon Valley in moving beyond its legacy of manufacturing have been conflicted, more often than not seeking to reindustrialize the region, despite no clear strategy for what industry will come in the future.
Local communities across the region will not find success in isolation. The businesses and workers of current and past steel communities will only find success by being fully integrated with the growth and dynamism that exists across the region. Hoping to rebuild a past that is long since gone can only delay that future.
Christopher Briem is a regional economist with the Urban & Regional Analysis program at the University of Pittsburgh’s University Center for Social and Urban Research [UCSUR]. He can be reached at cbriem@pitt.edu.
This article first appeared on PublicSource and is republished here under a Creative Commons license.
About Post Author
