Steelworkers union reiterates vow to exclusively back Cleveland-Cliffs in U.S. Steel takeover

The United Steelworkers is making it clear that the union exclusively supports Cleveland-Cliffs Inc.’s bid to buy United States Steel Corp., a longtime strategic supplier to the auto industry.

USW President Tom Conway said the union only endorses one bid for the iconic American steelmaker, saying that the Cleveland-based producer’s plan will preserve union jobs.

The comment comes after Conway said he received countless calls from potential bidders seeking the union’s approval — a necessary legal step for anyone seeking to buy U.S. Steel, because the labor group has the right to counter, Conway said.
 

“I was adamant that the Cliffs bid is the only one the union will consider due to its synergies and the fact that it best preserves blast furnace and steelmaking capacity and the jobs of USW members,” Conway said Tuesday in an interview. “The union is committed to that proposal and the USS board should move quickly to conclude this transaction.”

Cliffs published a letter from the Steelworkers on Sunday stating the union endorsement as it jousted with U.S. Steel over its takeover offer. Monday’s higher all-cash bid by Esmark Inc. created market confusion because it was unclear whether the lesser-known firm — or others that US Steel said made unsolicited offers — sought union approval.

Conway said the union won’t support any other bidder, domestic or foreign.

Shares of U.S. Steel dropped 2.7 percent to close Tuesday at $30.23.

In another developmentm, Esmark majority owner and CEO James Bouchard said in an interview with Reuters on Tuesday that his steelmaker, which does not publicly report its earnings, has cash for its $7.8 billion bid for U.S. Steel sitting in his bank account.

Bouchard said he had $10 billion available and Esmark itself had no debt. "I got $10 billion in cash in my bank account," Bouchard said. He did not provide more details to verify he has access to the cash.

Bouchard added he was being advised on his offer for U.S. Steel by an "international bank" he declined to name, which was also willing to lend to him.

The former U.S. Steel executive said Esmark was "the third largest steelmaker in the country," without elaborating with any figures.

In 2008, he sold another company of his with the same name to Russian steelmaker OAO Severstal for $1.3 billion. He subsequently bought back the Esmark name, trademark and intellectual property to create his latest steelmaker, which he says generates over $500 million in annual revenue.

Bloomberg and Reuters contributed to this report.