US Steel, One Year In: Nippon Steel Deal Starts to Deliver

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One year has passed since Nippon Steel completed its $14.2 billion acquisition of US Steel, thereby making US Steel a wholly owned subsidiary.

Ahead of this milestone, Nippon Steel Vice Chairman and Vice President Moritaka Hiroshi—who also serves as Chairman of US Steel—spoke to reporters and said the projected ¥100 billion (about $625 million) profit contribution from US Steel in the fiscal year ending March 2027 could "exceed expectations."

With reforms to improve profitability progressing smoothly under Nippon Steel's leadership, he expressed confidence in post-acquisition management, saying US Steel "listens to us 100%."

Improved Relations as USW Leadership Changes

"I want to reset our relationship," the new United Steelworkers (USW) president, Roxanne Brown, who took office in March, reportedly said to Moritaka over dinner. She proposed starting fresh and building a constructive partnership, setting aside past tensions.

The acquisition of the iconic American steelmaker by a foreign company had drawn fierce opposition from the USW. Former chairman David McCall had repeatedly criticized the deal, and the Trump administration had obtained a "golden share"—granting veto power over key management decisions—as a condition of approval.

The USW's stance had been a significant risk for Nippon Steel's US operations. However, Brown signaled a shift toward a forward-looking approach. With a labor agreement revision due in September, Moritaka said: "There are no major issues. The atmosphere is actually one of wanting to wrap up negotiations quickly and move forward."

He also noted that over the past year there had been "absolutely no government intervention," and that US Steel's management has proceeded without obstruction.

Reform on 260 Fronts

Nippon Steel has deployed around 100 staff to US Steel, running in parallel with investments in equipment upgrades and production expansion.

The company identified challenges and is implementing 260 improvement measures, transferring expertise such as end-to-end quality control—which rigorously traces defects back to their origin in the production process—and integrating sales and manufacturing operations. US Steel, recognizing Nippon Steel's competitiveness, appears to have fully embraced these reforms.

A Good Purchase

In Asia, steel prices have languished due to cheap imports from China driven by overproduction. By contrast, the US steel market—shielded by high tariffs—continues to see domestic demand expand even amid tensions in the Middle East, with prices running at more than double Asian levels. With favorable market conditions combined with steady cost improvements, the ¥100 billion-plus profit target for fiscal March 2027 now looks likely to be surpassed.

The strategy of tapping into a growth market insulated from Chinese influence is playing out as intended, and Moritaka said plainly: "It was a good purchase."

Through US Steel, Nippon Steel has also gained a foothold in US cutting-edge research, including new ties with Carnegie Mellon University—a world leader in AI and robotics.

At the same time, the acquisition is pressing Nippon Steel itself to change. Moritaka acknowledged that the company has "a somewhat bureaucratic, bottom-up approach," and that "decision-making speed and style need to evolve to meet global standards."

The road to recouping returns on this massive investment is long, and raising the caliber of global management—including talent development—remains a key challenge.