Study finds that upgrade of U. S. Steel’s Mon Valley Works facilities would lead to nearly 5,000 construction jobs and $38 million in taxes
PITTSBURGH--(BUSINESS WIRE)--Oct. 1, 2024--
United States Steel Corporation (NYSE: X) (“U. S. Steel”) released a new economic impact analysis today, conducted by Parker Strategy Group, that assesses how the proposed $1 billion investment committed by Nippon Steel Corporation (“Nippon Steel”) to modernize U. S. Steel’s Mon Valley Works following the closing of the pending merger with U. S. Steel would generate a significant economic impact in Pennsylvania.
For the purposes of the study, construction ($600 million) and equipment costs ($400 million) are separated and it is assumed that $600 million of the $1 billion investment would be spent in Pennsylvania.
Considering the supply chain and labor realities that would reduce in-state spending for any major construction project in the Mon Valley, the study looked at a range of spending scenarios.
According to the study, if just 80% of the $600 million construction project is spent in Pennsylvania, the Nippon Steel investment would generate a $952.9 million incremental economic impact over a two-year timeframe.
Nippon Steel is committed to investing no less than $1 billion in the Mon Valley Works operations following closing of the transaction to extend the production life of integrated assets and enhance the security of steel supply to American manufacturers. Together with the previously announced $1.4 billion capital expenditures in BLA-covered facilities, these investments are strong commitments to the region and union-represented facilities that go well beyond what is currently required by the Basic Labor Agreement.
Among the findings, the study showed concentrated economic impact to Southwest Pennsylvania and increased impact if construction dollars are spent in Pennsylvania.
“Not only will this deal secure U. S. Steel’s Pennsylvania footprint – an economic boon benefiting communities and employees – the Nippon Steel investment in Mon Valley Works facilities would cause a positive ripple effect across the Pennsylvania economy,” said President and Chief Executive Officer of U. S. Steel David B. Burritt. “While the economic impact is undeniable, what is most heartening is the consequential economic and generational impact this investment will have on the families and communities of the Mon Valley.”
The study predicts that when just 40% of the investment is spent in state it would create nearly 2,500 jobs and generate an almost half billion-dollar economic impact (2,432 jobs, $476.4 million total impact) over a two-year period.
When 80% of the project costs are spent in Pennsylvania, the impact increases dramatically doubling the number of jobs created (4,864 jobs) and generating almost $1 billion in economic impact ($952.9 million total impact) over a two-year period.
“The Nippon Steel investment makes possible a generational upgrade at the Mon Valley Works facilities that will only occur if the transaction closes,” said Scott Buckiso, Senior Vice President & Chief Manufacturing Officer, North American Flat-Rolled Segment. “With a new lease on life, these facilities would support and sustain jobs at U. S. Steel and across the region for small businesses that depend on our continued presence in the Mon Valley.”
Read the full economic impact study here.
A 2023 economic impact study showed that U. S. Steel’s operations in PA generated $3.6 billion in total economic impact, supported and sustained 11,417 jobs through its operations and purchases from the local supply chain, and generated $138.2 million in state and local taxes as a result of operations and capital spending.
About U. S. Steel
Founded in 1901, United States Steel Corporation is a leading steel producer. With an unwavering focus on safety, the Company’s customer-centric Best for All® strategy is advancing a more secure, sustainable future for U. S. Steel and its stakeholders. With a renewed emphasis on innovation, U. S. Steel serves the automotive, construction, appliance, energy, containers, and packaging industries with high value-added steel products such as U. S. Steel’s proprietary XG3® advanced high-strength steel. The Company also maintains competitively advantaged iron ore production and has an annual raw steelmaking capability of 22.4 million net tons. U. S. Steel is headquartered in Pittsburgh, Pennsylvania, with world-class operations across the United States and in Central Europe. For more information, please visit www.ussteel.com.
About Parker Strategy Group
With over 50 years of combined experience, Parker Strategy Group is a national consulting firm specializing in economic impact with extensive experience across the government, corporate, and non-profit sectors. We are committed to delivering statistically valid, industry-respected results that give organizations the confidence that their analysis is both defensible and actionable for internal and external audiences.
Led by Nichole Parker, a national economic impact expert with over 30 years of experience and more than 600 economic impact studies, Parker Strategy Group excels in producing economic analysis that is both defensible and easily understood. Nichole’s deep expertise as an economic analyst enables clients to confidently explain their impact to key audiences. Past and current clients include FGS Global, University of Washington, Penn State University, and the Association of Independent Colleges of Pennsylvania.
www.parkerstrategygroup.com
Cautionary Note Regarding Forward-Looking Statements
This press release contains information regarding United States Steel Corporation (the “Company”) that may constitute “forward-looking statements,” as that term is defined under the Private Securities Litigation Reform Act of 1995 and other securities laws, that are subject to risks and uncertainties. We intend the forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in those sections. Generally, such forward-looking statements are identified by using the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “project,” “target,” “forecast,” “aim,” “should,” “plan,” “goal,” “future,” “will,” “may” and similar expressions or by using future dates in connection with any discussion of, among other things, statements regarding the proposed transaction between the Company and Nippon Steel Corporation and the potential impact of investments that Nippon Steel may make in certain of the Company’s facilities. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. Forward-looking statements include all statements that are not historical facts. Many of these statements depend on matters which, by their nature, are inherently uncertain and outside of the Company’s control. Caution should be taken not to place undue reliance on any such forward-looking statements because such statements speak only as of the date when made. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from present expectations or projections. Risks and uncertainties include without limitation: the ability of the parties to consummate the proposed transaction between the Company and Nippon Steel Corporation, on a timely basis or at all; the timing, receipt and terms and conditions of any required governmental and regulatory approvals of the proposed transaction; the occurrence of any event, change or other circumstances that could give rise to the termination of the definitive agreement and plan of merger relating to the proposed transaction (the “Merger Agreement”); and the risk that the parties to the Merger Agreement may not be able to satisfy the conditions to the proposed transaction in a timely manner or at all. The Company directs readers to its Form 10-K for the year ended December 31, 2023, and Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, and the other documents it files with the SEC for other risks associated with the Company’s future performance. These documents contain and identify important factors that could cause actual results to differ materially from those contained in the forward-looking statements. The Company does not undertake any duty to update any forward-looking statement to conform the statement to actual results or changes in the Company’s expectations whether as a result of new information, future events or otherwise, except as required by law.
Disclaimer
This economic analysis report is an independent analysis of Parker Strategy Group and is based upon certain information provided by United States Steel Corporation and is subject to certain assumptions. The conclusions presented in the report are the result of Parker Strategy Group’s independent analysis and have not been verified by United States Steel Corporation, Nippon Steel Corporation or their affiliates. Actual outcomes may differ.
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Source: United States Steel Corporation
